INDIANA MICHIGAN POWER CO, S-3, 1998-04-09

INDIANA MICHIGAN POWER CO
S-3, 1998-04-09
ELECTRIC SERVICES

Previous: IMPERIAL BANCORP, DEF 14A, 1998-04-09

Next: KANEB SERVICES INC, 8-A12B, 1998-04-09

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

Indiana Michigan Power Company
(Exact name of registrant as specified in its charter)

Indiana 35-0410455
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

One Summit Square
Fort Wayne, Indiana 46801
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (219) 425-2111

ARMANDO A. PENA, Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza
Columbus, Ohio 43215
(614) 223-2850
(Name, address and telephone number, including
area code, of agent for service)

It is respectfully requested that the Commission send copies
of all notices, orders and communications to:

Simpson Thacher & Bartlett Dewey Ballantine LLP
425 Lexington Avenue 1301 Avenue of the Americas
New York, NY 10017-3909 New York, NY 10019-6092
Attention: James M. Cotter Attention: E. N. Ellis, IV

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of the Registration
Statement.

If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
please check the following box. [ ]

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

Title of Proposed
Each Class Maximum Proposed
of Offering Maximum
Securities Amount Price Aggregate Amount of
to be to be Per Offering Registration
Registered Registered Unit* Price* Fee

Junior
Subordinated
Debentures $50,000,000 100% $50,000,000 $14,750

*Estimated solely for purpose of calculating the registration fee.

The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which specifi-
cally states that this registration statement shall thereafter
become effective in accordance with Section 8(a) of the Securities
Act of 1933, or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

The within Prospectus contains the information required by
Rule 429 of the Commission under the Securities Act of 1933 with
respect to $75,000,000 of Junior Subordinated Debentures of the
registrant remaining unsold under Registration Statement No. 333-
22171, declared effective February 27, 1997, for which a filing fee
of $22,728 was paid.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
TION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER
THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

SUBJECT TO COMPLETION, DATED APRIL 9, 1998

PROSPECTUS
$125,000,000

INDIANA MICHIGAN POWER COMPANY

______% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
SERIES B, DUE 2038

The Junior Subordinated Deferrable Interest Debentures, Series
B, Due 2038, will mature on ________, 2038 (the "New Junior
Subordinated Debentures"). Interest on the New Junior Subordinated
Debentures is payable quarterly, in arrears, on each March 31, June
30, September 30 and December 31, commencing June 30, 1998. The
New Junior Subordinated Debentures will be redeemable at 100% of
the principal amount redeemed plus accrued interest to the redemp-
tion date at the option of the Company in whole or in part on or
after _______ ___, 2003. The New Junior Subordinated Debentures
will be represented by a global debenture registered in the name of
a nominee of The Depository Trust Company, as Depository, and will
be available for purchase in denominations of $25 and any integral
multiple thereof. See "Description of New Junior Subordinated
Debentures" herein.

Application will be made to have the New Junior Subordinated
Debentures listed on the New York Stock Exchange.

SEE "INVESTMENT CONSIDERATIONS" FOR CERTAIN INFORMATION RELE-
VANT TO AN INVESTMENT IN THE NEW JUNIOR SUBORDINATED DEBENTURES,
INCLUDING THE PERIODS AND CIRCUMSTANCES DURING AND UNDER WHICH
PAYMENT OF INTEREST ON THE NEW JUNIOR SUBORDINATED DEBENTURES MAY
BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

Initial Public Underwriting Proceeds to
Offering Price(1) Discount(2)(4) Company(3)(4)

Per New Junior
Subordinated
Debenture ...... 100.00 % % %

Total ........ $125,000,000 $ $

(1) Plus accrued interest, if any, from the date of original
issuance.

(2) The Company has agreed to indemnify the Underwriters against
certain liabilities, including certain liabilities under the
Securities Act of 1933, as amended. See "Underwriting"
herein.

(3) Before deducting expenses payable by the Company, estimated at
$______.

(4) The Underwriting Discount will be % of the principal amount
of the New Junior Subordinated Debentures sold to certain
institutions. Therefore, to the extent any such sales are
made to such institutions, the actual total Underwriting Dis-
count will be less than, and the actual total Proceeds to
Company will be greater than, the amounts shown in the table
above.

The New Junior Subordinated Debentures are offered
severally by the Underwriters, subject to prior sale, when, as and
if issued and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It
is expected that delivery of the New Junior Subordinated Debentures
will be made in New York, New York, on or about ____________, 1998.

Merrill Lynch & Co.

Morgan Stanley Dean Witter

Salomon Smith Barney

The date of this Prospectus is ____________, 1998.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE
OF THE NEW JUNIOR SUBORDINATED DEBENTURES OFFERED HEREBY, INCLUDING
BY ENTERING STABILIZING BIDS, PURCHASING NEW SUBORDINATED
DEBENTURES TO COVER SHORT POSITIONS AND IMPOSING PENALTY BIDS. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING" HEREIN.

No dealer, salesperson or other person has been authorized to
give any information or to make any representation not contained in
this Prospectus in connection with the offer made by this Pros-
pectus, and, if given or made, such information or representation
must not be relied upon as having been authorized by the Company or
any underwriter, agent or dealer. This Prospectus does not con-
stitute an offer to sell, or a solicitation of an offer to buy, by
any underwriter, agent or dealer in any jurisdiction in which it is
unlawful for such underwriter, agent or dealer to make such an
offer or solicitation. Neither the delivery of this Prospectus nor
any sale made thereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the
Company since the date hereof or thereof.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "1934 Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "SEC"). Such reports and
other information may be inspected and copied at the public
reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C., 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois, 60661; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The SEC maintains a Web site at http://www.sec.gov
containing reports, proxy statements and information statements and
other information regarding registrants that file electronically
with the SEC, including the Company. Certain of the Company's
securities are listed on the New York Stock Exchange, where reports
and other information concerning the Company may also be inspected.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Company with the SEC are
incorporated in this Prospectus by reference:

-- The Company's Annual Report on Form 10-K for the year
ended December 31, 1997 and Form 10-K/A dated April 1, 1998.

All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Prospectus and prior to the termination of the offering made
by this Prospectus shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing
of such documents.

Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modi-
fied or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently
filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modi-
fied or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom
a copy of this Prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all of the docu-
ments described above which have been incorporated by reference in
this Prospectus, other than exhibits to such documents. Written
requests for copies of such documents should be addressed to Mr. G.
C. Dean, American Electric Power Service Corporation, 1 Riverside
Plaza, Columbus, Ohio 43215 (telephone number: 614-223-1000). The
information relating to the Company contained in this Prospectus
does not purport to be comprehensive and should be read together
with the information contained in the documents incorporated by
reference.

TABLE OF CONTENTS
Page

Available Information. . . . . . . . . . . . . . . . . . . . . 2
Documents Incorporated by Reference. . . . . . . . . . . . . . 2
Table of Contents. . . . . . . . . . . . . . . . . . . . . . . 3
Investment Considerations. . . . . . . . . . . . . . . . . . . 3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 5
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . 5
Description of New Junior Subordinated Debentures. . . . . . . 6
Certain United States Federal Income Tax Consequences. . . . . 16
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . 20
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . 20

INVESTMENT CONSIDERATIONS

Prospective purchasers of New Junior Subordinated Debentures
should carefully review the information contained elsewhere in this
Prospectus and should particularly consider the following matters:

Subordination of New Junior Subordinated Debentures

Payment of the principal of, premium, if any, and interest on
the New Junior Subordinated Debentures is subordinated and subject
in right of payment to the prior payment in full of all Senior
Indebtedness of the Company. As of December 31, 1997, outstanding
Senior Indebtedness of the Company aggregated approximately
$954,600,000. There are no terms in the New Junior Subordinated
Debentures that limit the Company's ability to incur additional
indebtedness, including indebtedness that ranks senior to the New
Junior Subordinated Debentures. See "Description of New Junior
Subordinated Debentures--Subordination" herein.

Option to Extend Interest Payment Period

The Company has the right under the Indenture to extend the
interest payment period from time to time on the New Junior Sub-
ordinated Debentures to a period not exceeding 20 consecutive
quarters and not extending beyond the maturity of the New Junior
Subordinated Debentures, and as a consequence, quarterly interest
payments on the New Junior Subordinated Debentures would be
deferred (but would continue to accrue with interest thereon
compounded quarterly to the extent permitted by law) during any
such extended interest payment period. In the event that the
Company exercises this right, the Company may not declare or pay
dividends on, or purchase, acquire, or make a liquidation payment
with respect to, any of its capital stock, or make any guarantee
payments with respect to the foregoing. Therefore, the Company
believes that the extension of an interest payment period on the
New Junior Subordinated Debentures is unlikely. Prior to the
termination of any such extension period, the Company may further
extend the interest payment period, provided that such extension
period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond
the maturity of the New Junior Subordinated Debentures. Upon the
termination of any extension period and the payment of all accrued
and unpaid interest then due, the Company may select a new
extension period, subject to the above requirements. See
"Description of Junior Subordinated Debentures--Option to Extend
Interest Payment Period" herein.

Should an extended interest payment period occur, holders of
the New Junior Subordinated Debentures will continue to accrue
income (as original issue discount) for United States federal
income tax purposes even though interest is not being paid on a
current basis. As a result, a holder will include such interest in
gross income for United States federal income tax purposes in ad-
vance of the receipt of cash, and will not receive the cash from
the Company related to such income if a holder disposes of New
Junior Subordinated Debentures prior to the record date for payment
of interest. See "Certain United States Federal Income Tax
Consequences--Interest Income and Original Issue Discount" herein.

Certain Trading Characteristics of the New Junior Subordinated
Debentures

The New Junior Subordinated Debentures are expected to trade
as equity securities on the New York Stock Exchange. Consequently,
purchasers will not pay and sellers will not receive any accrued
and unpaid interest on the New Junior Subordinated Debentures that
is not included in the trading price. For certain tax consequences
with respect to such sales, see "Certain United States Federal
Income Tax Consequences--Sale, Exchange and Retirement of New
Junior Subordinated Debentures" herein.

THE COMPANY

The Company is engaged in the generation, purchase, trans-
mission and distribution of electric power to approximately 549,000
customers in northern and eastern Indiana and southwestern
Michigan, and in supplying electric power at wholesale to other
electric utility companies, rural electric cooperatives and
municipalities. Its principal executive offices are located at One
Summit Square, Fort Wayne, Indiana 46801 (telephone number:
219-425-2111). The Company is a subsidiary of American Electric
Power Company, Inc. ("AEP") and is a part of the American Electric
Power integrated utility system (the "AEP System"). The executive
offices of AEP are located at 1 Riverside Plaza, Columbus, Ohio
43215 (telephone number: 614-223-1000).

USE OF PROCEEDS

The Company proposes to use the net proceeds from the sale of
the New Junior Subordinated Debentures to refund directly or
indirectly, its currently outstanding debt and/or cumulative
preferred stock, and for working capital. The Company's First
Mortgage Bonds, Designated Medium Term Notes, 7.80% Series due July
1, 2023 ($20,000,000 principal amount outstanding) may be redeemed
after July 1, 1998 at their regular redemption price of 105.85% of
the principal amount thereof or pursuant to the maintenance and
replacement provisions of its Mortgage and Deed of Trust dated June
1, 1939 or by the use of proceeds of released property or the
proceeds of insurance at 100.00% of the principal amount thereof,
all plus accrued interest to the date of redemption. The Company's
First Mortgage Bonds, 7% due 1998 ($35,000,000 principal amount
outstanding) will mature on May 1, 1998.

The Company estimates that its consolidated construction costs
(inclusive of allowance for funds during construction) for 1998
will be approximately $169,000,000. At March 31, 1998, the Company
had approximately $110,475,000 of short-term indebtedness
outstanding.

RATIO OF EARNINGS TO FIXED CHARGES

Below is set forth the ratio of earnings to fixed charges for
each of the twelve month periods ended December 31, 1993 through
1997:

Twelve Months Ended Ratio

December 31, 1993 . . . . . . . . . . . . . . . . . . . 2.06
December 31, 1994 . . . . . . . . . . . . . . . . . . . 2.23
December 31, 1995 . . . . . . . . . . . . . . . . . . . 2.31
December 31, 1996 . . . . . . . . . . . . . . . . . . . 2.62
December 31, 1997 . . . . . . . . . . . . . . . . . . . 2.55

DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES

The New Junior Subordinated Debentures will be issued as a new
series of Junior Subordinated Debentures under an Indenture, dated
as of March 1, 1996, between the Company and The First National
Bank of Chicago, as Trustee (the "Trustee"), as heretofore
supplemented and amended and as to be further supplemented
(collectively, the "Indenture"). Section and Article references
used herein are references to provisions of the Indenture unless
otherwise noted.

All Junior Subordinated Deferrable Interest Debentures
(including the New Junior Subordinated Debentures) issued and to be
issued under the Indenture are herein sometimes referred to as
"Junior Subordinated Debentures". Copies of the Indenture,
including the form of Supplemental Indenture pursuant to which each
series of the New Junior Subordinated Debentures will be issued
(the "new Supplemental Indenture") are filed as exhibits to the
Registration Statement.

The following statements include brief summaries of certain
provisions of the Indenture under which Junior Subordinated
Debentures have been issued. Such summaries do not purport to be
complete and reference is made to the Indenture for complete state-
ments of such provisions.

General

The New Junior Subordinated Debentures will be unsecured,
subordinated obligations of the Company. The Indenture does not
limit the aggregate principal amount of Junior Subordinated
Debentures that may be issued thereunder and provides that the
Junior Subordinated Debentures may be issued thereunder from time
to time in one or more series.

The Indenture does not contain any provisions that afford
holders of New Junior Subordinated Debentures protection in the
event of a highly leveraged transaction involving the Company.

Principal Amount, Interest and Maturity

The New Junior Subordinated Debentures will be limited in
aggregate principal amount to $125,000,000.

The New Junior Subordinated Debentures will mature on the date
shown on the cover page hereof and will bear interest at the rate
per annum shown in the title thereof from the date on which the New
Junior Subordinated Debentures are originally issued until the
principal amount thereof becomes due and payable. Interest will be
payable quarterly, in arrears, on each March 31, June 30, September
30 and December 31, commencing June 30, 1998. Interest (other than
interest payable on redemption or maturity) will be payable to the
persons in whose names the New Junior Subordinated Debentures are
registered at the close of business on the relevant regular record
dates, which will be one Business Day (as hereinafter defined)
prior to the relevant payment dates, except that if the New Junior
Subordinated Debentures are no longer represented by a global
debenture, the regular record date for such interest installment
shall be the close of business on March 15, June 15, September 15
or December 15 (regardless of whether it is a Business Day) next
preceding an interest payment date. Interest payable on redemption
or maturity will be payable to the person to whom the principal is
paid. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest
is payable on the New Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date
will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately pre-
ceding Business Day, in each case with the same force and effect as
if made on such date. A "Business Day" shall mean any day other
than a day on which banking institutions in the Borough of
Manhattan, the City and State of New York are authorized or obli-
gated by law to close.

Redemption

The New Junior Subordinated Debentures will be redeemable at
the option of the Company, in whole or in part, at any time on or
after _______ ____, 2003, upon not less than 30 nor more than 60
days' notice, at 100% of the principal amount redeemed together
with accrued and unpaid interest to the redemption date.

Option to Extend Interest Payment Period

The Company shall have the right at any time during the term
of the New Junior Subordinated Debentures from time to time to
extend the interest payment period of the New Junior Subordinated
Debentures for up to 20 consecutive quarters (the "Extension
Period"), at the end of which Extension Period the Company shall
pay all interest accrued and unpaid thereon (together with interest
thereon compounded quarterly at the rate specified for the New
Junior Subordinated Debentures to the extent permitted by applic-
able law); provided that during any such Extension Period, the
Company shall not declare or pay any dividend on, or purchase,
acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payments with respect to the
foregoing. Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period, pro-
vided that such Extension Period together with all such previous
and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the maturity of the New Junior Subordi-
nated Debentures. Upon the termination of any Extension Period and
the payment of all accrued and unpaid interest then due, the
Company may select a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company shall
give the holders of the New Junior Subordinated Debentures notice
of its selection of such Extension Period at least 10 Business Days
prior to the earlier of (i) the next interest payment date or (ii)
the date the Company is required to give notice to holders of the
New Junior Subordinated Debentures (or, if applicable, to the New
York Stock Exchange or other applicable self-regulatory organiza-
tion) of the record or payment date of such interest payment, but
in any event not less than two Business Days prior to such record
date.

Subordination

The Indenture provides that payment of the principal of, pre-
mium, if any, and interest on Junior Subordinated Debentures is
subordinated and subject in right of payment to the prior payment
in full of all Senior Indebtedness (as defined below) of the Com-
pany as provided in the Indenture. No payment of principal of
(including redemption and sinking fund payments), premium, if any,
or interest on, Junior Subordinated Debentures may be made if pay-
ment of principal, premium, interest or any other payment on any
Senior Indebtedness is not made when due, any applicable grace
period with respect to such default has ended and such default has
not been cured or waived or ceased to exist, or if the maturity of
any Senior Indebtedness has been accelerated because of a default.
Upon any distribution of assets of the Company to creditors upon
any dissolution, winding up, liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership
or other proceedings, all principal of, premium, if any, and
interest due or to become due on, all Senior Indebtedness must be
paid in full before any payment is made on Junior Subordinated
Debentures. Subject to the payment in full of all Senior Indebted-
ness, the rights of the holders of Junior Subordinated Debentures
will be subrogated to the rights of the holders of Senior Indebted-
ness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on Junior Subordinated Deben-
tures are paid in full. (Sections 14.01 to 14.04).

The term "Senior Indebtedness" shall mean the principal of,
premium, if any, interest on and any other payment due pursuant to
any of the following, whether outstanding at the date of execution
of the Indenture or thereafter incurred, created or assumed:

(a) all indebtedness of the Company evidenced by notes,
debentures, bonds or other securities sold by the Company for
money or other obligations for money borrowed;

(b) all indebtedness of others of the kinds described in
the preceding clause (a) assumed by or guaranteed in any man-
ner by the Company or in effect guaranteed by the Company; and

(c) all installment purchase agreements entered into by
the Company in connection with revenue bonds issued by an
agency or political subdivision of a state of the United
States of America;

(d) all renewals, extensions or refundings of indebted-
ness of the kinds described in either of the preceding clauses
(a), (b) and (c);

unless, in the case of any particular indebtedness, renewal, exten-
sion or refunding, the instrument creating or evidencing the same
or the assumption or guarantee of the same expressly provides that
such indebtedness, renewal, extension or refunding is not superior
in right of payment to or is pari passu with Junior Subordinated
Debentures. Such Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination pro-
visions irrespective of any amendment, modification or waiver of
any term of such Senior Indebtedness. (Sections 1.01 and 14.08).

The Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued. As of December 31, 1997, Senior
Indebtedness of the Company aggregated approximately $954,600,000.

Covenant of the Company

The Company will not declare or pay any dividend on, or pur-
chase, acquire or make a distribution or liquidation payment with
respect to, any of its capital stock or make any guarantee payments
with respect thereto, if at such time (i) an Event of Default under
the Indenture has occurred and is continuing or (ii) the Company
has given notice of its selection of an Extension Period and such
period, or any extension thereof, is continuing.

Form, Exchange, Registration and Transfer

The New Junior Subordinated Debentures initially will be
issued in registered form and will be represented by a global
debenture (the "Global Debenture"). See "Book-Entry Debentures"
herein. If not represented by one or more global debentures, New
Junior Subordinated Debentures may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed)
or exchange, at the office of the Debenture Registrar, without ser-
vice charge and upon payment of any taxes and other governmental
charges as described in the Indenture. Such transfer or exchange
will be effected upon the Company or the Debenture Registrar being
satisfied with the documents of title and identity of the person
making the request. The Company has appointed the Trustee as
Debenture Registrar with respect to New Junior Subordinated Deben-
tures. (Section 2.05).

The Company shall not be required to (i) issue, register the
transfer of or exchange any New Junior Subordinated Debenture
during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of less than all
the outstanding New Junior Subordinated Debentures and ending at
the close of business on the day of such mailing or (ii) register
the transfer of or exchange any New Junior Subordinated Debentures
or portions thereof called for redemption. (Section 2.05).

Payment and Paying Agents

Payment of principal of and premium (if any) on any New Junior
Subordinated Debenture will be made only against surrender to the
Paying Agent of such New Junior Subordinated Debenture. Principal
of and any premium and interest on New Junior Subordinated Deben-
tures will be payable at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that
at the option of the Company payment of any interest may be made by
check mailed to the address of the person entitled thereto as such
address shall appear in the Debenture Register with respect to such
New Junior Subordinated Debentures. See "Principal Amount,
Interest and Maturity" herein.

The Trustee will act as Paying Agent with respect to New
Junior Subordinated Debentures. The Company may at any time desig-
nate additional Paying Agents or rescind the designation of any
Paying Agents or approve a change in the office through which any
Paying Agent acts. (Sections 4.02 and 4.03).

All moneys paid by the Company to a Paying Agent for the pay-
ment of the principal of or premium or interest, if any, on any New
Junior Subordinated Debenture that remain unclaimed at the end of
two years after such principal, premium, if any, or interest shall
have become due and payable, subject to applicable law, will be
repaid to the Company and the holder of such New Junior Subordi-
nated Debenture will thereafter look only to the Company for
payment thereof. (Section 11.04).

Book-Entry Debentures

Except under the circumstances described below, the New Junior
Subordinated Debentures will be issued in whole or in part in the
form of a Global Debenture that will be deposited with, or on be-
half of, The Depository Trust Company, New York, New York ("DTC"),
or such other depository as may be subsequently designated (the
"Depository"), and registered in the name of a nominee of the
Depository.

Book-Entry Debentures represented by a Global Debenture will
not be exchangeable for Certificated Debentures and, except under
the circumstances described below, will not otherwise be issuable
as Certificated Debentures.

So long as the Depository, or its nominee, is the registered
owner of a Global Debenture, such Depository or such nominee, as
the case may be, will be considered the sole owner of the indi-
vidual Book-Entry Debentures represented by such Global Debenture
for all purposes under the Indenture. Payments of principal of and
premium, if any, and any interest on individual Book-Entry Deben-
tures represented by a Global Debenture will be made to the Deposi-
tory or its nominee, as the case may be, as the Owner of such
Global Debenture. Except as set forth below, owners of beneficial
interests in a Global Debenture will not be entitled to have any of
the individual Book-Entry Debentures represented by such Global
Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Book-Entry Deben-
tures and will not be considered the Owners thereof under the
Indenture, including, without limitation, for purposes of consen-
ting to any amendment thereof or supplement thereto.

If the Depository is at any time unwilling or unable to con-
tinue as depository and a successor depository is not appointed,
the Company will issue individual Certificated Debentures in
exchange for the Global Debenture representing the corresponding
Book-Entry Debentures. In addition, the Company may at any time
and in its sole discretion determine not to have any New Junior
Subordinated Debentures represented by the Global Debenture and, in
such event, will issue individual Certificated Debentures in ex-
change for the Global Debenture representing the corresponding
Book-Entry Debentures. In any such instance, an owner of a Book-
Entry Debenture represented by a Global Debenture will be entitled
to physical delivery of individual Certificated Debentures equal in
principal amount to such Book-Entry Debenture and to have such
Certificated Debentures registered in his or her name. Individual
Certificated Debentures so issued will be issued as registered
Debentures in denominations of $25 and integral multiples thereof.

DTC has confirmed to the Company and the Underwriters the
following information:

1. DTC will act as securities depository for the Global
Debenture. The New Junior Subordinated Debentures will be
issued as fully-registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). One fully-
registered Global Debenture will be issued for the series of
New Junior Subordinated Debentures, in the aggregate principal
amount of such series, and will be deposited with DTC.

2. DTC is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of
Section 17A of the 1934 Act. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes
in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Partici-
pants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organiza-
tions. DTC is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to
DTC and its Participants are on file with the SEC.

3. Purchases of New Junior Subordinated Debentures
under the DTC system must be made by or through Direct
Participants, which will receive a credit for the New Junior
Subordinated Debentures on DTC's records. The ownership
interest of each actual purchaser of each New Junior Sub-
ordinated Debenture ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from
DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the trans-
action, as well as periodic statements of their holdings, from
the Direct or Indirect Participant through which the Benefi-
cial Owner entered into the transaction. Transfers of owner-
ship interests in the New Junior Subordinated Debentures are
to be accomplished by entries made on the books of Partici-
pants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their owner-
ship interests in New Junior Subordinated Debentures, except
in the event that use of the book-entry system for the New
Junior Subordinated Debentures is discontinued.

4. To facilitate subsequent transfers, all New Junior
Subordinated Debentures deposited by Participants with DTC are
registered in the name of DTC's partnership nominee, Cede &
Co. The deposit of New Junior Subordinated Debentures with
DTC and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the New Junior Subordinated Deben-
tures; DTC's records reflect only the identity of the Direct
Participants to whose accounts such New Junior Subordinated
Debentures are credited, which may or may not be the Benefi-
cial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their
customers.

5. Conveyance of notices and other communications by
DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Partici-
pants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory require-
ments as may be in effect from time to time.

6. Redemption notices shall be sent to Cede & Co. If
less than all of the New Junior Subordinated Debentures are
being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant in such
issue to be redeemed.

7. Neither DTC nor Cede & Co. will consent or vote with
respect to the New Junior Subordinated Debentures. Under its
usual procedures, DTC mails an Omnibus Proxy to the Company as
soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the New Junior Subordi-
nated Debentures are credited on the record date (identified
in a listing attached to the Omnibus Proxy).

8. Principal and interest payments on the New Junior
Subordinated Debentures will be made to DTC. DTC's practice
is to credit Direct Participants' accounts on the date on
which interest is payable in accordance with their respective
holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on such date. Pay-
ments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer
form or registered in "street name", and will be the responsi-
bility of such Participant and not of DTC, the Underwriters or
the Company, subject to any statutory or regulatory require-
ments as may be in effect from time to time. Payment of prin-
cipal and interest to DTC is the responsibility of the Company
or the Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disburse-
ment of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.

9. DTC may discontinue providing its services as
securities depository with respect to the New Junior Subordi-
nated Debentures at any time by giving reasonable notice to
the Company and the Trustee. Under such circumstances, in the
event that a successor securities depository is not obtained,
Certificated Debentures are required to be printed and
delivered.

10. The Company may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor
securities depository). In that event, Certificated Deben-
tures will be printed and delivered.

The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes to
be reliable, but the Company takes no responsibility for the accu-
racy thereof.

None of the Company, the Trustee or any agent for payment on or
registration of transfer or exchange of any Global Debenture will
have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial interests in
such Global Debenture or for maintaining, supervising or reviewing
any records relating to such beneficial interests.

Modification of the Indenture

The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in principal amount of Junior Subordinated Debentures of
each series that are affected by the modification, to modify the
Indenture or any supplemental indenture affecting that series or
the rights of the holders of that series of Junior Subordinated
Debentures; provided, that no such modification may, without the
consent of the holder of each outstanding Junior Subordinated
Debenture affected thereby, (i) extend the fixed maturity of any
Junior Subordinated Debentures of any series, or reduce the prin-
cipal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the
redemption thereof or (ii) reduce the percentage of Junior Subordi-
nated Debentures, the holders of which are required to consent to
any such supplemental indenture. (Section 9.02).

In addition, the Company and the Trustee may execute, without
the consent of any holder of Junior Subordinated Debentures, any
supplemental indenture for certain other usual purposes including
the creation of any new series of Junior Subordinated Debentures.
(Sections 2.01, 9.01 and 10.01).

Events of Default

The Indenture provides that any one or more of the following
described events, which has occurred and is continuing, constitutes
an "Event of Default" with respect to each series of Junior Subor-
dinated Debentures:

(a) failure for 10 days to pay interest on Junior Sub-
ordinated Debentures of that series when due; provided that a
valid extension of the interest payment period by the Company
shall not constitute a default in the payment of interest for
this purpose; or

(b) failure to pay principal or premium, if any, on
Junior Subordinated Debentures of that series when due whether
at maturity, upon redemption, by declaration or otherwise, or
to make payment required by any sinking or analogous fund with
respect to that series; or

(c) failure by the Company to observe or perform any
other covenant (other than those specifically relating to
another series) contained in the Indenture for 90 days after
written notice to the Company from the Trustee or the holders
of at least 25% in principal amount of the outstanding Junior
Subordinated Debentures of that series; or

(d) certain events involving bankruptcy, insolvency or
reorganization of the Company. (Section 6.01).

The Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of any particular series of Junior
Subordinated Debentures may declare the principal due and payable
immediately upon an Event of Default with respect to such series,
but the holders of a majority in aggregate outstanding principal
amount of such series may annul such declaration and waive the
default with respect to such series if the default has been cured
and a sum sufficient to pay all matured installments of interest
and principal otherwise than by acceleration and any premium has
been deposited with the Trustee. (Sections 6.01 and 6.06).

The holders of a majority in aggregate outstanding principal
amount of any series of Junior Subordinated Debentures have the
right to direct the time, method and place of conducting any pro-
ceeding for any remedy available to the Trustee for that series.
(Section 6.06). Subject to the provisions of the Indenture
relating to the duties of the Trustee in case an Event of Default
shall occur and be continuing, the Trustee will be under no obliga-
tion to exercise any of its rights or powers under the Indenture at
the request or direction of any of the holders of the Junior
Subordinated Debentures, unless such holders shall have offered to
the Trustee indemnity satisfactory to it. (Section 7.02).

The holders of a majority in aggregate outstanding principal
amount of any series of Junior Subordinated Debentures affected
thereby may, on behalf of the holders of all Junior Subordinated
Debentures of such series, waive any past default, except a default
in the payment of principal, premium, if any, or interest when due
otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest
and principal otherwise than by acceleration and any premium has
been deposited with the Trustee) or a call for redemption of Junior
Subordinated Debentures of such series. (Section 6.06). The Com-
pany is required to file annually with the Trustee a certificate as
to whether or not the Company is in compliance with all the condi-
tions and covenants under the Indenture. (Section 5.03(d)).

Consolidation, Merger and Sale

The Indenture does not contain any covenant that restricts the
Company's ability to merge or consolidate with or into any other
corporation, sell or convey all or substantially all of its assets
to any person, firm or corporation or otherwise engage in restruc-
turing transactions, provided that the successor corporation as-
sumes due and punctual payment of principal or premium, if any, and
interest on the Junior Subordinated Debentures. (Section 10.01).

Defeasance and Discharge

Under the terms of the Indenture, the Company will be dis-
charged from any and all obligations in respect of the New Junior
Subordinated Debentures (except in each case for certain obliga-
tions to register the transfer or exchange of New Junior Subordi-
nated Debentures, replace stolen, lost or mutilated New Junior
Subordinated Debentures, maintain paying agencies and hold moneys
for payment in trust) if the Company deposits with the Trustee, in
trust, moneys or Governmental Obligations (as defined in the Inden-
ture), or a combination thereof, in an amount sufficient to pay all
the principal of, and interest on, New Junior Subordinated
Debentures of such series on the dates such payments are due in
accordance with the terms of the New Junior Subordinated Deben-
tures. Such defeasance or discharge may occur only if, among other
things, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that the holders of the New Junior Subordi-
nated Debentures will not recognize gain, loss or income for
federal income tax purposes as a result of the satisfaction and
discharge of the Indenture with respect to such series and such
holders will be subject to federal income taxation on the same
amounts and in the same manner and at the same times as if such
satisfaction and discharge had not occurred. (Section 11.01).

Governing Law

The Indenture and New Junior Subordinated Debentures will be
governed by, and construed in accordance with, the laws of the
State of New York. (Section 13.05).

Concerning the Trustee

AEP System companies, including the Company, utilize or may
utilize some of the banking services offered by The First National
Bank of Chicago in the normal course of their businesses. Among
such services are the making of short-term loans, generally at
rates related to the prime commercial interest rate.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

In the opinion of Simpson Thacher & Bartlett, tax counsel to
the Company, the following summary accurately describes the United
States federal income tax consequences that may be relevant to the
purchase, ownership and disposition of New Junior Subordinated
Debentures as of the date hereof. It deals only with New Junior
Subordinated Debentures held by initial purchasers who have
purchased New Junior Subordinated Debentures at the initial
offering price thereof and who hold such New Junior Subordinated
Debentures as capital assets and does not deal with special
situations, such as those of dealers in securities or currencies,
financial institutions, life insurance companies, real estate
investment trusts, regulated investment companies, tax-exempt
investors, persons holding New Junior Subordinated Debentures as a
part of a hedging or conversion transaction or a straddle, United
States Holders (as defined below) whose "functional currency" is
not the U.S. dollar, or Non-United States Holders (as defined
below) who own (actually or constructively) ten percent or more of
the combined voting power of all classes of voting stock of the
Company, who are present in the United States or who have any other
special status with respect to the United States. Furthermore, the
discussion below is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "Code") and regulations,
rulings and judicial decisions thereunder as of the date hereof,
and such authorities may be repealed, revoked or modified so as to
result in federal income tax consequences different from those
discussed below. Persons considering the purchase, ownership or
disposition of New Junior Subordinated Debentures should consult
their own tax advisors concerning the federal income tax
consequences in light of their particular situations as well as any
consequences arising under the laws of any other taxing
jurisdiction.

United States Holders

As used herein, a "United States Holder" of a New Junior
Subordinated Debenture means a holder that is a citizen or resident
of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or
any political subdivision thereof, an estate the income of which is
subject to United States federal income taxation regardless of its
source or any trust if a court within the United States is able to
exercise primary supervision over the administration of the trust
and one or more United States persons as defined in Section
7701(a)(30) of the Code have the authority to control all
substantial decisions of the trust. A "Non-United States Holder"
is a holder that is not a United States Holder.

Interest Income and Original Issue Discount

The Company believes that, under the applicable Treasury
regulations, the New Junior Subordinated Debentures will not be
treated as issued with "original issue discount" ("OID") within the
meaning of section 1273(a) of the Code. Accordingly, except as set
forth below, stated interest on a New Junior Subordinated Debenture
will generally be taxable to a United States Holder as ordinary
income at the time it is paid or accrued in accordance with the
United States Holder's method of accounting for tax purposes.

If, however, the Company exercises its right to defer payments
of interest on the New Junior Subordinated Debentures, the New
Junior Subordinated Debentures will become OID instruments at such
time and all United States Holders of the New Junior Subordinated
Debentures will be required to accrue the stated interest on the
New Junior Subordinated Debentures on a daily economic accrual
basis (using the constant yield-to-maturity method of accrual
described in section 1272 of the Code) during the Extension Period
even though the Company will not pay such interest until the end of
the Extension Period, and even though some United States Holders
may use the cash method of tax accounting. Moreover, thereafter
the New Junior Subordinated Debentures will be taxed as OID
instruments for as long as they remain outstanding. Thus, even
after the end of an Extension Period, all United States Holders
would be required to continue to include the stated interest on the
New Junior Subordinated Debentures (and any de minimis OID) in
income on a daily economic accrual basis, regardless of their
method of tax accounting and in advance of receipt of the cash
attributable to such interest income. Under the OID economic
accrual rules, a United States Holder would accrue an amount of
interest income each year that approximates the stated interest
payments called for under the terms of the New Junior Subordinated
Debentures, and actual cash payments of interest payments on the
New Junior Subordinated Debentures would not be reported separately
as taxable income.

The Treasury regulations described above have not yet been
addressed in any rulings or other interpretations by the Internal
Revenue Service ("IRS"), and it is possible that the IRS could take
a contrary position. If the IRS were to assert successfully that
the stated interest on the New Junior Subordinated Debentures was
OID regardless of whether the Company exercises its option to defer
payments of interest on such debentures, all United States Holders
of New Junior Subordinated Debentures would be required to include
such stated interest in income on a daily economic accrual basis as
described above.

Sale, Exchange and Retirement of New Junior Subordinated Debentures

Upon the sale, exchange or retirement of a New Junior
Subordinated Debenture, a United States Holder will recognize gain
or loss equal to the difference between the amount realized upon
the sale, exchange or retirement (except to the extent that such
amount realized is characterized as a payment in respect of accrued
but unpaid interest on such United States Holder's New Junior
Subordinated Debentures that such United States Holder has not
included in income previously) and the adjusted tax basis of the
New Junior Subordinated Debenture. A United States Holder's tax
basis in a New Junior Subordinated Debenture will, in general, be
the United States Holder's cost therefor, increased by any OID
previously included in income by the United States Holder and
reduced by any cash payments in respect of such accrued OID on the
New Junior Subordinated Debenture. Such gain or loss will be
capital gain or loss and will be long-term capital gain or loss if
at the time of sale, exchange or retirement the New Junior
Subordinated Debenture has been held for more than one year.
Capital gains of individuals derived with respect to capital assets
held for more than one year are eligible for reduced rates of
taxation depending upon the holding period of such capital assets.
United States Holders should consult their own tax advisors
regarding the capital gains rates applicable to them. The
deductibility of capital losses is subject to limitations.

Non-United States Holders

Under present United States federal income and estate tax law,
and subject to the discussion below concerning backup withholding:

(a) no withholding of United States federal income tax
will be required with respect to the payment by the Company or
any Paying Agent of principal or interest (which for purposes
of this discussion includes OID) on a New Junior Subordinated
Debenture owned by a Non-United States Holder, provided (i)
the beneficial owner is not a controlled foreign corporation
that is related to the Company through stock ownership, (ii)
the beneficial owner is not a bank whose receipt of interest
on a New Junior Subordinated Debenture is described in section
881(c)(3)(A) of the Code and (iii) either (y) the beneficial
owner certifies to the Company or its agent, under the
penalties of perjury, that it is not a United States person,
citizen or resident and provides its name and address or (z)
a financial institution holding the New Junior Subordinated
Debentures on behalf of the beneficial owner certifies, under
penalties of perjury, that such statement has been received by
it and furnishes the Company or its agent with a copy thereof;

(b) no withholding of United States federal income tax
will be required with respect to any gain or income realized
by a Non-United States Holder upon the sale, exchange or
retirement of a New Junior Subordinated Debenture; and

(c) a New Junior Subordinated Debenture beneficially
owned by an individual who at the time of death is a Non-
United States Holder will not be subject to United States
federal estate tax as a result of such individual's death,
provided that the interest payments with respect to such
debenture would not have been, if received at the time of such
individual's death, effectively connected with the conduct of
a trade or business by such individual in the United States.

Backup Withholding and Information Reporting

In general, information reporting requirements will apply to
certain payments of principal, interest and OID paid on New Junior
Subordinated Debentures and to the proceeds of sale of a New Junior
Subordinated Debenture made to United States Holders other than
certain exempt recipients (such as corporations). A 31 percent
backup withholding tax will apply to such payments if the United
States Holder fails to provide a taxpayer identification number or
certification of foreign or other exempt status or fails to report
in full dividend and interest income.

No information reporting or backup withholding will be
required with respect to payments made by the Company or any paying
agent to Non-United States Holders if a statement described in
(a)(iii) under "Non-United States Holders" has been received and
the payor does not have actual knowledge that the beneficial owner
is a United States person.

Payments of the proceeds from the sale by a Non-United States
Holder of a New Junior Subordinated Debenture made to or through a
foreign office of a broker will not be subject to information
reporting or backup withholding, except that if the broker is, for
federal income tax purposes, a United States person, a controlled
foreign corporation or a foreign person that derives 50 percent or
more of its gross income for certain periods from the conduct of a
trade or business in the United States, such payments will not be
subject to backup withholding but may be subject to information
reporting. Payments of proceeds from the sale of a New Junior
Subordinated Debenture to or through the United States office of a
broker is subject to information reporting and backup withholding
unless the Non-United States Holder or the beneficial owner
certifies as to its non-United States status or otherwise
establishes an exemption.

Any amounts withheld under the backup withholding rules will
be allowed as a refund or a credit against such holder's U. S.
federal income tax liability provided the required information is
furnished to the IRS.

New Withholding Regulations

On October 6, 1997, the Treasury Department issued new
regulations (the "New Regulations") which make certain
modifications to the withholding, backup withholding and
information reporting rules described above. The New Regulations
attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for
payments made after December 31, 1999, subject to certain
transition rules. Prospective investors are urged to consult their
own tax advisors regarding the New Regulations.

LEGAL OPINIONS

Opinions with respect to the legality of New Junior Subordi-
nated Debentures will be rendered by Simpson Thacher & Bartlett,
425 Lexington Avenue, New York, New York, and 1 Riverside Plaza,
Columbus, Ohio, counsel for the Company, and by Dewey Ballantine,
LLP, 1301 Avenue of the Americas, New York, New York, counsel for
the Underwriters. Additional legal opinions in connection with the
offering of New Junior Subordinated Debentures may be given by
Thomas G. Berkemeyer or Ann B. Graf, counsel for the Company. Mr.
Berkemeyer is Assistant General Counsel, and Ms. Graf is a Senior
Attorney, in the Legal Department of American Electric Power
Service Corporation, a wholly owned subsidiary of AEP. From time
to time, Dewey Ballantine LLP acts as counsel to affiliates of the
Company in connection with certain matters.

Statements as to United States taxation in the Prospectus
under the caption, "Certain United States Federal Income Tax
Consequences" have been passed upon for the Company by Simpson
Thacher & Bartlett, counsel to the Company, and are stated herein
on their authority.

EXPERTS

The financial statements and the related financial statement
schedule incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their reports,
which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.

UNDERWRITING

Subject to the terms and conditions set forth in the Under-
writing Agreement, the Company has agreed to sell to each of the
Underwriters named below ("Underwriters"), and each of the Under-
writers has severally agreed to purchase the number of New Junior
Subordinated Debentures set forth opposite its name below:

Principal
Amount of
New Junior
Subordinated
Underwriters Debentures

Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . $
Morgan Stanley & Co. Incorporated. . . . . . . . . .
Smith Barney Inc.. . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . $125,000,000

The Underwriters are committed to take and pay for all of the
New Junior Subordinated Debentures, if any are taken. The Under-
writing Agreement provides that under certain circumstances
involving a default of Underwriters, less than all of the New
Junior Subordinated Debentures may be purchased.

The Company has been advised by the Underwriters that the
Underwriters propose initially to offer the New Junior Subordinated
Debentures to the public at the public offering price set forth on
the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of ______% of the principal
amount of the New Junior Subordinated Debentures. The Underwriters
may allow, and such dealers may reallow, a discount not in excess
of ______% of the principal amount of the New Junior Subordinated
Debentures to certain other dealers. After the initial public
offering, the public offering price, concession and reallowance may
be changed.

The New Junior Subordinated Debentures are a new issue of
securities with no established trading market. While the Company
intends to list the New Junior Subordinated Debentures on the New
York Stock Exchange, there can be no assurance that an active
market for the New Junior Subordinated Debentures will develop or
be sustained in the future on such Exchange. Listing will depend
upon satisfaction of such Exchange's listing requirements with
respect to the New Junior Subordinated Debentures. The Company has
been advised by the Underwriters that they intend to make a market
in the New Junior Subordinated Debentures, but are not obligated to
do so and may discontinue market making at any time without notice.
No assurance can be given as to the liquidity of the trading market
for the New Junior Subordinated Debentures.

The Underwriters, and certain affiliates thereof, engage in
transactions with and perform services for the Company and its
affiliates in the ordinary course of business.

The Company has agreed to indemnify the Underwriters against
certain liabilities, including certain liabilities under the
Securities Act of 1933.

In connection with this offering and in compliance with
applicable law and industry practice, the Underwriters may
overallot or effect transactions which stabilize, maintain or
otherwise affect the market price of the New Junior Subordinated
Debentures at levels above those which might otherwise prevail in
the open market, including by entering stabilizing bids, purchasing
New Junior Subordinated Debentures to cover syndicate short
positions and imposing penalty bids. A stabilizing bid means the
placing of any bid, or the effecting of any purchase, for the
purpose of pegging, fixing or maintaining the price of a security.
Covering a syndicate short position means placing a bid or
effecting a purchase of a security on behalf of the underwriting
syndicate to reduce the short position created in connection with
the offering. Imposing a penalty bid means purchasing a security
in the open market to reduce the underwriting syndicate's short
position or to stabilize the price of the security and in
connection therewith reclaiming the amount of the selling
concession from the underwriters and selling group members who sold
such securities as part of the offering.

In general, purchases of a security for the purpose of
stabilization or to reduce a syndicate short position could cause
the price of the security to be higher than it might be in the
absence of such purchases. The imposition of a penalty bid might
also have an effect on the price of a security to the extent that
it were to discourage resales of the security.

Neither the Company nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of
any effect that the transactions described above may have on the
price of the New Junior Subordinated Debentures. In addition,
neither the Company nor any of the Underwriters makes any
representation that the Underwriters will engage in such
transactions or that such transactions once commenced, will not be
discontinued without notice.

The Underwriters, and certain affiliates thereof, engage in
transactions with, and from time to time have performed services
for, the Company and its affiliates in the ordinary course of
business.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.*

Securities and Exchange Commission Filing Fees. . . . . $ 14,750
Printing Registration Statement, Prospectus, etc. . . .$ 30,000
Independent Auditors' Fees. . . . . . . . . . . . . . . $ 15,000
Charges of Trustee (including counsel fees) . . . . . . $ 4,500
Legal Fees of Counsel . . . . . . . . . . . . . . . . . $ 45,000
Rating Agency Fees. . . . . . . . . . . . . . . . . . . $ 45,000
Miscellaneous Expenses. . . . . . . . . . . . . . . . . $ 20,000

Total . . . . . . . . . . . . . . . . . . . . $174,250

*Estimated, except for filing fees.

Item 15. Indemnification of Directors and Officers.

Section 23-1-37-8 of the Indiana Code provides that an Indiana
corporation may indemnify an individual made a party to a pro-
ceeding because the individual is or was a director if (i) the
individual's conduct was in good faith, (ii) the individual reason-
ably believed that, in the case of conduct in the individual's
official capacity with the corporation, his or her conduct was in
the best interests of the corporation and, in all other cases, his
or her conduct was at least not opposed to the best interests of
the corporation and (iii) in the case of a criminal proceeding,
that the director either had reasonable cause to believe his or her
conduct was lawful or had no reasonable cause to believe that such
conduct was unlawful. The termination of a proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent is not, of itself, determinative that a director did
not meet the required standard of conduct. Section 23-1-37-9 re-
quires a corporation, unless limited by its articles of incorpora-
tion, to indemnify a director who has been wholly successful in the
defense of a proceeding against reasonable expenses (including
counsel fees) so incurred. Section 23-1-37-10 authorizes a corpo-
ration to pay for or reimburse the reasonable expenses (including
counsel fees) incurred by a director in advance of final disposi-
tion of a proceeding upon: (1) a determination that, in light of
the facts then known, indemnification is permissible; (2) receipt
by the corporation of a written affirmation by the director of his
or her good faith belief that the required standard of conduct has
been met; and (3) receipt by the corporation of a written under-
taking by the director to repay any such advance if it is ultimate-
ly determined that the director did not meet the required standard
of conduct.

Pursuant to Section 23-1-37-11, a director may apply for
indemnification to a court of competent jurisdiction. Pursuant to
Section 23-1-37-13, an officer is entitled to mandatory indemnifi-
cation under Section 23-1-37-9 and to apply for court-ordered
indemnification under Section 23-1-37-11 to the same extent as a
director. A corporation may indemnify and advance expenses to an
officer, employee or agent to the same extent as to a director.
Pursuant to Section 23-1-37-14, a corporation may purchase and
maintain insurance on behalf of an individual who is a director,
officer, employee or agent of the corporation, whether or not the
corporation would have power by statute to indemnify the individual
against the same liability. Section 23-1-37-15 provides that the
statutory provisions do not exclude any other rights to
indemnification and advance for expenses that a person may
otherwise have. The by-laws of the Company provide for the
indemnification of directors and officers of the Company to the
full extent permitted by the Indiana Code.

The above is a general summary of certain provisions of the
Company's by-laws and of the Indiana Code and is subject in all
respects to the specific and detailed provisions of the Company's
by-laws and the Indiana Code.

Reference is made to the Underwriting Agreement, filed as
Exhibit 1 hereto, which provides for indemnification, under certain
circumstances, of the Company, certain of its directors and
officers, and persons who control the Company.

The Company maintains insurance policies insuring its direc-
tors and officers against certain obligations that may be incurred
by them.

Item 16. Exhibits.

Reference is made to the information contained in the Exhibit
Index filed as a part of this Registration Statement.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) That, for purposes of determining any liability
under the Securities Act of 1933, each filing of the regis-
trant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incor-
porated by reference in this registration statement shall be
deemed to be a new registration statement relating to the New
Junior Subordinated Debentures, and the offering thereof at
that time shall be deemed to be the initial bona fide offering
thereof.

(2) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the laws of the State of Indiana, the registrant's
bylaws, or otherwise, the registrant has been advised that in
the opinion of the SEC such indemnification is against public
policy as expressed in said Act and is, therefore, unenforce-
able. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or control-
ling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the New
Junior Subordinated Debentures, the registrant will, unless in
the opinion of its counsel the matter has been settled by con-
trolling precedent, submit to a court of appropriate jurisdic-
tion the question whether such indemnification by it is
against public policy as expressed in said Act and will be
governed by the final adjudication of such issue.

(3) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form
of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.

(4) For the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable cause to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Columbus and State of Ohio, on the 9th day of April, 1998.

INDIANA MICHIGAN POWER COMPANY

/s/ E. Linn Draper, Jr.*
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following
persons in the capacities and on the dates indicated.

Signature Title Date

(i) Principal Executive
Officer Chairman of the
Board and Chief
E. Linn Draper, Jr.* Executive Officer April 9, 1998

(ii) Principal Financial
Officer:

G. P. Maloney* Vice President April 9, 1998

(iii) Principal Accounting
Officer:

P. J. DeMaria* Controller April 9, 1998

(iv) A Majority of the
Directors:

K. G. Boyd*
C. R. Boyle, III*
G. A. Clark*
P. J. DeMaria*
E. Linn Draper, Jr.*
Wm. J. Lhota*
G. P. Maloney*
James J. Markowsky*
D. B. Synowiec* April 9, 1998
J. H. Vipperman*
W. E. Walters*
E. H. Wittkamper*

*By /s/ Armando A. Pena
(Armando A. Pena, Attorney-in-Fact)

EXHIBIT INDEX

Certain of the following exhibits, designated with an
asterisk (*), are filed herewith. The exhibits not so designated
have heretofore been filed with the Commission and, pursuant to 17
C.F.R. Sections 201.24 and 230.411, are incorporated herein by reference
to the documents indicated following the descriptions of such
exhibits.

Exhibit No. Description

*1 - Copy of proposed form of Underwriting Agreement for
the New Junior Subordinated Debentures.

*4(a) - Copy of Indenture, dated as of March 1, 1996,
between the Company and The First National Bank of
Chicago, as Trustee, for Junior Subordinated
Debentures.

*4(b) - Copy of First Supplemental Indenture, dated as of
March 1, 1996, between the Company and The First
National Bank of Chicago, as Trustee, providing for
the issuance of $40,000,000 principal amount of 8%
Junior Subordinated Debentures, due 2026.

*4(c) - Copy of form of Supplemental Indenture to be
entered into between the Company and The First
National Bank of Chicago, as Trustee, for New
Junior Subordinated Debentures.

*5 - Opinion of Simpson Thacher & Bartlett as to the
legality of New Junior Subordinated Debentures.

*8 - Tax opinion of Simpson Thacher & Bartlett.

12 - Statement re: Computation of Ratios [Annual Report
on Form 10-K of the Company for the period ended
December 31, 1997, File No. 1-3570, Exhibit 12].

*23(a) - Consent of Deloitte & Touche LLP.

23(b) - Consent of Simpson Thacher & Bartlett (included in
Exhibits 5&8).

*24 - Powers of Attorney and resolutions of the Board of
Directors of the Company.

*25 - Form T-1 re: Eligibility of The First National Bank
of Chicago.

INDIANA MICHIGAN POWER COMPANY

Underwriting Agreement

Dated April __, 1998

AGREEMENT made between INDIANA MICHIGAN POWER COMPANY, a
corporation organized and existing under the laws of the State of
Indiana (the Company), and the several persons, firms and
corporations (the Underwriters) named in Exhibit 1 hereto.

WITNESSETH:

WHEREAS, the Company proposes to issue and sell $125,000,000
principal amount of its __% Junior Subordinated Deferrable Interest
Debentures, Series B, Due 2038 (the Debentures) to be issued
pursuant to the Indenture dated as of March 1, 1996, between the
Company and The First National Bank of Chicago, as trustee (the
Trustee), as supplemented by the Supplemental Indenture dated as of
March 1, 1996 and the Second Supplemental Indenture dated as of
April 1, 1998 between the Company and the Trustee (said Indenture
as so supplemented being hereafter referred to as the "Indenture");
and

WHEREAS, the Underwriters have designated the person signing
this Agreement (the Representative) to execute this Agreement on
behalf of the respective Underwriters and to act for the respective
Underwriters in the manner provided in this Agreement; and

WHEREAS, the Company has prepared and filed, in accordance
with the provisions of the Securities Act of 1933 (the Act), with
the Securities and Exchange Commission (the Commission), a
registration statement and a prospectus relating to the Debentures
and such registration statement has become effective; and

WHEREAS, such registration statement, as it may have been
amended through the time the same first became effective (the
Effective Date), including the financial statements, the documents
incorporated or deemed incorporated therein by reference, the
exhibits thereto and the information deemed to be part thereof
pursuant to Rule 430A(b) of the Commission's General Rules and
Regulations under the Act (the Rules), being herein called the
Registration Statement, the prospectus included in the Registration
Statement when the same became effective that omits the
information, if any, deemed to be a part thereof pursuant to Rule
430A(b) of the Rules, being herein called the Preliminary
Prospectus, and the prospectus, including the price and terms of
the offering, the interest rate, maturity date and certain
information relating to the Underwriters of the Debentures first
filed with the Commission in accordance with Rule 430A and pursuant
to Rule 424(b) of the Rules, including all documents then
incorporated or deemed to have been incorporated therein by
reference, being herein called the Prospectus.

NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, it is agreed between the parties
as follows:

1. Purchase and Sale: Upon the basis of the warranties and
representations and on the terms and subject to the conditions
herein set forth, the Company agrees to sell to the respective
Underwriters named in Exhibit 1 hereto, severally and not jointly,
and the respective Underwriters, severally and not jointly, agree
to purchase from the Company, the respective principal amounts of
the Debentures set opposite their names in Exhibit 1 hereto,
together aggregating all of the Debentures, at a price equal to
__.__% of the principal amount thereof; except that such price will
be increased to __% of the principal amount of the Debentures sold
to certain institutions.

2. Payment and Delivery: Payment for the Debentures shall
be made to the Company in immediately available funds or in such
other manner as the Company and the Representative shall mutually
agree upon in writing, upon the delivery of the Debentures to the
Representative for the respective accounts of the Underwriters
against receipt therefor signed by the Representative on behalf of
itself and for the other Underwriters. Such delivery shall be made
at 10:00 A.M., New York Time, on _____ __, 1998 (or on such later
business day, not more than five business days subsequent to such
day, as may be mutually agreed upon by the Company and the
Underwriters), unless postponed in accordance with the provisions
of Section 7 hereof. The time at which payment and delivery are to
be made is herein called the Time of Purchase.

The delivery of the Debentures shall be made in fully
registered form, registered in the name of CEDE & CO., to the
offices of The Depository Trust Company in New York, New York and
the Underwriters shall accept such delivery.

3. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder are subject to the
accuracy of the warranties and representations on the part of the
Company on the date hereof and at the Time of Purchase and to the
following other conditions:

(a) That all legal proceedings to be taken and all
legal opinions to be rendered in connection with
the issue and sale of the Debentures shall be
satisfactory in form and substance to Dewey
Ballantine LLP, counsel to the Underwriters.

(b) That, at the Time of Purchase, the Representative
shall be furnished with the following opinions,
dated the day of the Time of Purchase, with con-
formed copies or signed counterparts thereof for
the other Underwriters, with such changes therein
as may be agreed upon by the Company and the
Representative with the approval of Dewey
Ballantine LLP, counsel to the Underwriters:

(1) Opinion of Simpson Thacher & Bartlett and
either of Thomas G. Berkemeyer, Esq. or Ann B.
Graf, Esq., counsel to the Company, substan-
tially in the forms attached hereto as
Exhibits A and B;

(2) Opinion of Dewey Ballantine LLP, counsel to
the Underwriters, substantially in the form
attached hereto as Exhibit C.

(c) That the Representative shall have received a
letter from Deloitte & Touche LLP in form and
substance satisfactory to the Representative, dated
as of the day of the Time of Purchase, (i)
confirming that they are independent public
accountants within the meaning of the Act and the
applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their
opinion the financial statements audited by them
and included or incorporated by reference in the
Registration Statement complied as to form in all
material respects with the then applicable
accounting requirements of the Commission,
including the applicable published rules and
regulations of the Commission and (iii) covering as
of a date not more than five business days prior to
the day of the Time of Purchase such other matters
as the Representative reasonably requests.

(d) That no amendment to the Registration Statement and
that no prospectus or prospectus supplement of the
Company relating to the Debentures and no document
which would be deemed incorporated in the
Prospectus by reference filed subsequent to the
date hereof and prior to the Time of Purchase shall
contain material information substantially dif-
ferent from that contained in the Registration
Statement which is unsatisfactory in substance to
the Representative or unsatisfactory in form to
Dewey Ballantine LLP, counsel to the Underwriters.

(e) That, at the Time of Purchase, an appropriate order
of the Indiana Utility Regulatory Commission,
necessary to permit the sale of the Debentures to
the Underwriters, shall be in effect; and that,
prior to the Time of Purchase, no stop order with
respect to the effectiveness of the Registration
Statement shall have been issued under the Act by
the Commission or proceedings therefor initiated.

(f) That, at the Time of Purchase, there shall not have
been any material adverse change in the business,
properties or financial condition of the Company
from that set forth in the Prospectus (other than
changes referred to in or contemplated by the
Prospectus), and that the Company shall, at the
Time of Purchase, have delivered to the Representa-
tive a certificate of an executive officer of the
Company to the effect that, to the best of his
knowledge, information and belief, there has been
no such change.

(g) That the Company shall have performed such of its
obligations under this Agreement as are to be
performed at or before the Time of Purchase by the
terms hereof.

4. Certain Covenants of the Company: In further consider-
ation of the agreements of the Underwriters herein contained, the
Company covenants as follows:

(a) As soon as practicable, and in any event within the
time prescribed by Rule 424 under the Act, to file
the Prospectus with the Commission; as soon as the
Company is advised thereof, to advise the
Representative and confirm the advice in writing of
any request made by the Commission for amendments
to the Registration Statement or the Prospectus or
for additional information with respect thereto or
of the entry of a stop order suspending the
effectiveness of the Registration Statement or of
the initiation or threat of any proceedings for
that purpose and, if such a stop order should be
entered by the Commission, to make every reasonable
effort to obtain the prompt lifting or removal
thereof.

(b) To deliver to the Underwriters, without charge, as
soon as practicable (and in any event within 24
hours after the date hereof), and from time to time
thereafter during such period of time (not exceed-
ing nine months) after the date hereof as they are
required by law to deliver a prospectus, as many
copies of the Prospectus (as supplemented or
amended if the Company shall have made any
supplements or amendments thereto) as the
Representative may reasonably request; and in case
any Underwriter is required to deliver a prospectus
after the expiration of nine months after the date
hereof, to furnish to any Underwriter, upon
request, at the expense of such Underwriter, a
reasonable quantity of a supplemental prospectus or
of supplements to the Prospectus complying with
Section 10(a)(3) of the Act.

(c) To furnish to the Representative a copy, certified
by the Secretary or an Assistant Secretary of the
Company, of the Registration Statement in the form
filed with the Commission and of all amendments
thereto (exclusive of exhibits), and, upon request,
to furnish to the Representative sufficient plain
copies thereof (exclusive of exhibits) for
distribution of one to the other Underwriters.

(d) For such period of time (not exceeding nine months)
after the date hereof as they are required by law
to deliver a prospectus, if any event shall have
occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make
the statements therein, in the light of the circum-
stances when the Prospectus is delivered to a
purchaser, not contain any untrue statement of a
material fact or not omit to state any material
fact required to be stated therein or necessary in
order to make the statements therein not
misleading, forthwith to prepare and furnish, at
its own expense, to the Underwriters and to dealers
(whose names and addresses are furnished to the
Company by the Representative) to whom principal
amounts of the Debentures may have been sold by the
Representative for the accounts of the Underwriters
and, upon request, to any other dealers making such
request, copies of such amendments to the Prospec-
tus or supplements to the Prospectus.

(e) As soon as practicable, the Company will make
generally available to its security holders and to
the Underwriters an earnings statement or
statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act.

(f) To use its best efforts to qualify the Debentures
for offer and sale under the securities or "blue
sky" laws of such jurisdictions as the
Representative may designate within six months
after the date hereof and itself to pay, or to
reimburse the Underwriters and their counsel for,
reasonable filing fees and expenses in connection
therewith in an amount not exceeding $3,500 in the
aggregate (including filing fees and expenses paid
and incurred prior to the effective date hereof),
provided, however, that the Company shall not be
required to qualify as a foreign corporation or to
file a consent to service of process or to file
annual reports or to comply with any other
requirements deemed by the Company to be unduly
burdensome.

(g) To pay all expenses, fees and taxes (other than
transfer taxes on resales of the Debentures by the
respective Underwriters) in connection with the
issuance and delivery of the Debentures, except
that the Company shall be required to pay the fees
and disbursements (other than disbursements
referred to in paragraph (f) of this Section 4) of
Dewey Ballantine LLP, counsel to the Underwriters,
only in the events provided in paragraph (h) of
this Section 4, the Underwriters hereby agreeing to
pay such fees and disbursements in any other event.

(h) If the Underwriters shall not take up and pay for
the Debentures due to the failure of the Company to
comply with any of the conditions specified in
Section 3 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of
Section 7 or 8 hereof, to pay the fees and dis-
bursements of Dewey Ballantine LLP, counsel to the
Underwriters, and, if the Underwriters shall not
take up and pay for the Debentures due to the
failure of the Company to comply with any of the
conditions specified in Section 3 hereof, to
reimburse the Underwriters for their reasonable
out-of-pocket expenses, in an aggregate amount not
exceeding a total of $10,000, incurred in connec-
tion with the financing contemplated by this
Agreement.

(i) During the period from the date hereof and
continuing to and including the earlier of (i) the
date which is after the Time of Purchase on which
the distribution of the Debentures ceases, as
determined by the Representative in its sole
discretion, and (ii) the date which is 30 days
after the Time of Purchase, the Company agrees not
to offer, sell, contract to sell or otherwise
dispose of any junior subordinated deferrable
interest debentures of the Company or any
substantially similar securities of the Company
without the consent of the Representative.

(j) The Company will use its best efforts to list,
subject to notice of issuance, the Debentures on
the New York Stock Exchange.

(k) The Company will timely file any certificate
required by Rule 52 under the Public Utility
Holding Company Act of 1935 in connection with the
sale of the Debentures.

5. Warranties of and Indemnity by the Company: The Company
represents and warrants to, and agrees with you, as set forth
below:

(a) the Registration Statement on its effective date
complied, or was deemed to comply, with the
applicable provisions of the Act and the rules and
regulations of the Commission and the Registration
Statement at its effective date did not, and at the
Time of Purchase will not, contain any untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, and the Preliminary Prospectus at the
time that the Registration Statement became
effective, and the Prospectus when first filed in
accordance with Rule 424(b) complies, and at the
Time of Purchase the Prospectus will comply, with
the applicable provisions of the Act and the Trust
Indenture Act of 1939, as amended, and the rules
and regulations of the Commission, the Preliminary
Prospectus at the time that the Registration
Statement became effective, and the Prospectus when
first filed in accordance with Rule 424(b) did not,
and the Prospectus at the Time of Purchase will
not, contain any untrue statement of a material
fact or omit to state a material fact required to
be stated therein or necessary to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading, except that the Company makes no
warranty or representation to the Underwriters with
respect to any statements or omissions made in the
Registration Statement, the Preliminary Prospectus
or Prospectus in reliance upon and in conformity
with information furnished in writing to the
Company by, or through the Representative on behalf
of, any Underwriter expressly for use in the
Registration Statement, the Preliminary Prospectus
or Prospectus, or to any statements in or omissions
from that part of the Registration Statement that
shall constitute the Statement of Eligibility under
the Trust Indenture Act of 1939 of any indenture
trustee under an indenture of the Company.

(b) As of the Time of Purchase, the Indenture will have
been duly authorized by the Company and duly
qualified under the Trust Indenture Act of 1939, as
amended, and, when executed and delivered by the
Trustee and the Company, will constitute a legal,
valid and binding instrument enforceable against
the Company in accordance with its terms and such
Debentures will have been duly authorized,
executed, authenticated and, when paid for by the
purchasers thereof, will constitute legal, valid
and binding obligations of the Company entitled to
the benefits of the Indenture, except as the
enforceability thereof may be limited by
bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights in
general, and except as the availability of the
remedy of specific performance is subject to
general principles of equity (regardless of whether
such remedy is sought in a proceeding in equity or
at law), and by an implied covenant of good faith
and fair dealing.

(c) To the extent permitted by law, the Company agrees
to indemnify and hold you harmless and each person,
if any, who controls you within the meaning of
Section 15 of the Act, against any and all losses,
claims, damages or liabilities, joint or several,
to which you, they or any of you or them may become
subject under the Act or otherwise, and to
reimburse you and such controlling person or
persons, if any, for any legal or other expenses
incurred by you or them in connection with
defending any action, insofar as such losses,
claims, damages, liabilities or actions arise out
of or are based upon any alleged untrue statement
or untrue statement of a material fact contained in
the Registration Statement, in the Preliminary
Prospectus, or in the Prospectus, or if the Company
shall furnish or cause to be furnished to you any
amendments or any supplemental information, in the
Prospectus as so amended or supplemented other than
amendments or supplements relating solely to
securities other than the Debentures (provided that
if such Prospectus or such Prospectus, as amended
or supplemented, is used after the period of time
referred to in Section 4(b) hereof, it shall
contain such amendments or supplements as the
Company deems necessary to comply with Section
10(a) of the Act), or arise out of or are based
upon any alleged omission or omission to state
therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, except insofar as such losses,
claims, damages, liabilities or actions arise out
of or are based upon any such alleged untrue state-
ment or omission, or untrue statement or omission
which was made in the Registration Statement, in
the Preliminary Prospectus or in the Prospectus, or
in the Prospectus as so amended or supplemented, in
reliance upon and in conformity with information
furnished in writing to the Company by or through
you expressly for use therein or with any state-
ments in or omissions from that part of the Regis-
tration Statement that shall constitute the State-
ment of Eligibility under the Trust Indenture Act,
of any indenture trustee under an indenture of the
Company, and except that this indemnity shall not
inure to your benefit (or of any person controlling
you) on account of any losses, claims, damages,
liabilities or actions arising from the sale of the
Debentures to any person if such loss arises from
the fact that a copy of the Prospectus, as the same
may then be supplemented or amended to the extent
such Prospectus was provided to you by the Company
(excluding, however, any document then incorporated
or deemed incorporated therein by reference), was
not sent or given by you to such person with or
prior to the written confirmation of the sale
involved and the alleged omission or alleged untrue
statement or omission or untrue statement was
corrected in the Prospectus as supplemented or
amended at the time of such confirmation, and such
Prospectus, as amended or supplemented, was timely
delivered to you by the Company. You agree
promptly after the receipt by you of written notice
of the commencement of any action in respect to
which indemnity from the Company on account of its
agreement contained in this Section 5(c) may be
sought by you, or by any person controlling you, to
notify the Company in writing of the commencement
thereof, but your omission so to notify the Company
of any such action shall not release the Company
from any liability which it may have to you or to
such controlling person otherwise than on account
of the indemnity agreement contained in this
Section 5(c). In case any such action shall be
brought against you or any such person controlling
you and you shall notify the Company of the
commencement thereof, as above provided, the
Company shall be entitled to participate in, and,
to the extent that it shall wish, including the
selection of counsel (such counsel to be reasonably
acceptable to the indemnified party), to direct the
defense thereof at its own expense. In case the
Company elects to direct such defense and select
such counsel (hereinafter, "Company's counsel"),
you or any controlling person shall have the right
to employ your own counsel, but, in any such case,
the fees and expenses of such counsel shall be at
your expense unless (i) the Company has agreed in
writing to pay such fees and expenses or (ii) the
named parties to any such action (including any
impleaded parties) include both you or any
controlling person and the Company and you or any
controlling person shall have been advised by your
counsel that a conflict of interest between the
Company and you or any controlling person may arise
(and the Company's counsel shall have concurred in
good faith with such advice) and for this reason it
is not desirable for the Company's counsel to
represent both the indemnifying party and the
indemnified party (it being understood, however,
that the Company shall not, in connection with any
one such action or separate but substantially
similar or related actions in the same jurisdiction
arising out of the same general allegations or
circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of
attorneys for you or any controlling person (plus
any local counsel retained by you or any
controlling person in their reasonable judgment),
which firm (or firms) shall be designated in
writing by you or any controlling person). No
indemnifying party shall, without the prior written
consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment
with respect to any litigation, or any
investigation or proceeding by any governmental
agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnifi-
cation could be sought under this Section 5
(whether or not the indemnified parties are actual
or potential parties thereto), unless such
settlement, compromise or consent (i) includes an
unconditional release of each indemnified party
from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of
fault, culpability or a failure to act by or on
behalf of any indemnified party. In no event shall
any indemnifying party have any liability or
responsibility in respect of the settlement or
compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened
action or claim effected without its prior written
consent.

(d) The documents incorporated by reference in the
Registration Statement or Prospectus, when they
were filed with the Commission, complied in all
material respects with the applicable provisions of
the 1934 Act and the rules and regulations of the
Commission thereunder, and as of such time of
filing, when read together with the Prospectus,
none of such documents contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.

(e) Since the respective dates as of which information
is given in the Registration Statement and the
Prospectus, except as otherwise referred to or
contemplated therein, there has been no material
adverse change in the business, properties or
financial condition of the Company.

(f) This Agreement has been duly authorized, executed
and delivered by the Company.

(g) The consummation by the Company of the transactions
contemplated herein will not conflict with, or
result in a breach of any of the terms or
provisions of, or constitute a default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets
of the Company under any contract, indenture,
mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company is a
party or by which it may be bound or to which any
of its properties may be subject (except for
conflicts, breaches or defaults which would not,
individually or in the aggregate, be materially
adverse to the Company or materially adverse to the
transactions contemplated by this Agreement.)

(h) No authorization, approval, consent or order of any
court or governmental authority or agency is
necessary in connection with the issuance and sale
by the Company of the Debentures the transactions
by the Company contemplated in this Agreement,
except (A) such as may be required under the 1933
Act or the rules and regulations thereunder; (B)
such as may be required under the Public Utility
Holding Company Act of 1935, as amended (the "1935
Act"); (C) the qualification of the Indenture under
the 1939 Act; (D) the approval of the Indiana
Utility Regulatory Commission; and (E) such
consents, approvals, authorizations, registrations
or qualifications as may be required under state
securities or Blue Sky laws.

The Company's indemnity agreement contained in Section 5(c)
hereof, and its covenants, warranties and representations contained
in this Agreement, shall remain in full force and effect regardless
of any investigation made by or on behalf of any person, and shall
survive the delivery of and payment for the Debentures hereunder.

6. Warranties of and Indemnity by Underwriters:

(a) Each Underwriter warrants and represents that the
information furnished in writing to the Company
through the Representative for use in the Registra-
tion Statement, in the Preliminary Prospectus, in
the Prospectus, or in the Prospectus as amended or
supplemented is correct as to such Underwriter.

(b) Each Underwriter agrees, to the extent permitted by
law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as
shall have signed the Registration Statement, and
each person, if any, who controls the Company
within the meaning of Section 15 of the Act, to the
same extent and upon the same terms as the indem-
nity agreement of the Company set forth in Section
5(c) hereof, but only with respect to untrue
statements or alleged untrue statements or
omissions or alleged omissions made in the Regis-
tration Statement, in the Preliminary Prospectus,
or in the Prospectus, or in the Prospectus as so
amended or supplemented, in reliance upon and in
conformity with information furnished in writing to
the Company by the Representative on behalf of such
Underwriter expressly for use therein. The Company
agrees promptly after the receipt by it of written
notice of the commencement of any action in respect
to which indemnity from you on account of your
agreement contained in this Section 6(b) may be
sought by the Company, or by any person controlling
the Company, to notify you in writing of the
commencement thereof, but the Company's omission so
to notify you of any such action shall not release
you from any liability which you may have to the
Company or to such controlling person otherwise
than on account of the indemnity agreement
contained in this Section 6(b).

The indemnity agreement on the part of each Underwriter
contained in Section 6(b) hereof, and the warranties and represen-
tations of such Underwriter contained in this Agreement, shall
remain in full force and effect regardless of any investigation
made by or on behalf of the Company or other person, and shall
survive the delivery of and payment for the Debentures hereunder.

7. Default of Underwriters: If any Underwriter under this
Agreement shall fail or refuse (otherwise than for some reason
sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to
purchase and pay for the principal amount of Debentures which it
has agreed to purchase and pay for hereunder, and the aggregate
principal amount of Debentures which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of the Debentures,
the other Underwriters shall be obligated severally in the
proportions which the amounts of Debentures set forth opposite
their names in Exhibit 1 hereto bear to the aggregate principal
amount of Debentures set forth opposite the names of all such non-
defaulting Underwriters, to purchase the Debentures which such
defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on the terms set forth herein; provided that in no
event shall the principal amount of Debentures which any
Underwriter has agreed to purchase pursuant to Section 1 hereof be
increased pursuant to this Section 7 by an amount in excess of one-
ninth of such principal amount of Debentures without the written
consent of such Underwriter. If any Underwriter or Underwriters
shall fail or refuse to purchase Debentures and the aggregate
principal amount of Debentures with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of
the Debentures then this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter; provided,
however, that the non-defaulting Underwriters may agree, in their
sole discretion, to purchase the Debentures which such defaulting
Underwriter or Underwriters agreed but failed or refused to
purchase on the terms set forth herein. In the event of any such
termination, the Company shall not be under any liability to any
Underwriter (except to the extent, if any, provided in Section 4(h)
hereof), nor shall any Underwriter (other than an Underwriter who
shall have failed or refused to purchase the Debentures without
some reason sufficient to justify, in accordance with the terms
hereof, its termination of its obligations hereunder) be under any
liability to the Company or any other Underwriter.

Nothing herein contained shall release any defaulting
Underwriter from its liability to the Company or any non-defaulting
Underwriter for damages occasioned by its default hereunder.

8. Termination of Agreement by the Underwriters: This
Agreement may be terminated at any time prior to the Time of
Purchase by the Representative if, after the execution and delivery
of this Agreement and prior to the Time of Purchase, in the
Representative's reasonable judgment, the Underwriters' ability to
market the Debentures shall have been materially adversely affected
because:

(i) trading in securities on the New York Stock Exchange
shall have been generally suspended by the Commission or by
the New York Stock Exchange, or

(ii) (A) a war involving the United States of America
shall have been declared, (B) any other national calamity
shall have occurred, or (C) any conflict involving the armed
services of the United States of America shall have escalated,
or

(iii) a general banking moratorium shall have been
declared by Federal or New York State authorities, or

(iv) there shall have been any decrease in the ratings of
the Company's first mortgage bonds by Moody's Investors
Services, Inc. (Moody's) or Standard & Poor's Ratings Group
(S&P) or either Moody's or S&P shall publicly announce that it
has such first mortgage bonds under consideration for possible
downgrade.

If the Representative elects to terminate this Agreement,
as provided in this Section 8, the Representative will promptly
notify the Company by telephone or by telex or facsimile
transmission, confirmed in writing. If this Agreement shall not be
carried out by any Underwriter for any reason permitted hereunder,
or if the sale of the Debentures to the Underwriters as herein
contemplated shall not be carried out because the Company is not
able to comply with the terms hereof, the Company shall not be
under any obligation under this Agreement and shall not be liable
to any Underwriter or to any member of any selling group for the
loss of anticipated profits from the transactions contemplated by
this Agreement (except that the Company shall remain liable to the
extent provided in Section 4(h) hereof) and the Underwriters shall
be under no liability to the Company nor be under any liability
under this Agreement to one another.

9. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to
the following addresses or by telex or facsimile transmission
confirmed in writing to the following addresses: if to the
Underwriters, to as
Representative, ,
New York, New York , Attention: ,
and, if to the Company, to Indiana Michigan Power Company, c/o
American Electric Power Service Corporation, 1 Riverside Plaza,
Columbus, Ohio 43215, attention of Armando A. Pena, Treasurer (fax
614/223-1687).

10. Parties in Interest: The agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the
Company (including the directors thereof and such of the officers
thereof as shall have signed the Registration Statement), the
controlling persons, if any, referred to in Sections 5 and 6
hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in
Section 7 hereof, no other person shall acquire or have any right
under or by the virtue of this Agreement.

11. Definition of Certain Terms: If there be two or more
persons, firms or corporations named in Exhibit 1 hereto, the term
"Underwriters", as used herein, shall be deemed to mean the several
persons, firms or corporations, so named (including the Representa-
tive herein mentioned, if so named) and any party or parties
substituted pursuant to Section 7 hereof, and the term "Representa-
tive", as used herein, shall be deemed to mean the representative
or representatives designated by, or in the manner authorized by,
the Underwriters. All obligations of the Underwriters hereunder
are several and not joint. If there shall be only one person, firm
or corporation named in Exhibit 1 hereto, the term "Underwriters"
and the term "Representative", as used herein, shall mean such
person, firm or corporation. The term "successors" as used in this
Agreement shall not include any purchaser, as such purchaser, of
any of the Debentures from any of the respective Underwriters.

12. Conditions of the Company's Obligations: The obligations
of the Company to issue and sell the Debentures hereunder are
subject to the Underwriters' performance of their obligations
hereunder, and the further condition that at the Time of Purchase
the Indiana Utility Regulatory Commission shall have issued
appropriate orders, and such orders shall remain in full force and
effect, authorizing the transactions contemplated hereby.

13. Applicable Law: This Agreement will be governed and
construed in accordance with the laws of the State of New York.

14. Execution of Counterparts: This Agreement may be
executed in several counterparts, each of which shall be regarded
as an original and all of which shall constitute one and the same
document.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, on the date first above written.

INDIANA MICHIGAN POWER COMPANY

By: s/Armando A. Pena
Armando A. Pena
Treasurer

as Representative
and on behalf of the Underwriters
named in Exhibit 1 hereto

By:

Managing Director

EXHIBIT 1

Name Principal Amount

Total $125,000,000

Exhibit 4(a)

INDIANA MICHIGAN POWER COMPANY

AND

THE FIRST NATIONAL BANK OF CHICAGO

AS TRUSTEE

INDENTURE

Dated as of March 1, 1996

Junior Subordinated Debentures

CROSS-REFERENCE TABLE

Section of
Trust Indenture Act Section of
of 1939, as amended Indenture

310(a). . . . . . . . . . . . . . . . . . . . . . 7.09
310(b). . . . . . . . . . . . . . . . . . . . . . 7.08
. . . . . . . . . . . . . . . . . . . . . . . . . 7.10
310(c). . . . . . . . . . . . . . . . . . . . . .Inapplicable
311(a). . . . . . . . . . . . . . . . . . . . . . 7.13
311(b). . . . . . . . . . . . . . . . . . . . . . 7.13
311(c). . . . . . . . . . . . . . . . . . . . . .Inapplicable
312(a). . . . . . . . . . . . . . . . . . . . . . 5.01
. . . . . . . . . . . . . . . . . . . . . . . . . 5.02(a)
312(b). . . . . . . . . . . . . . . . . . . . . . 5.02(c)
. . . . . . . . . . . . . . . . . . . . . . . . . 5.02(d)
312(c). . . . . . . . . . . . . . . . . . . . . . 5.02(e)
313(a). . . . . . . . . . . . . . . . . . . . . . 5.04(a)
313(b). . . . . . . . . . . . . . . . . . . . . . 5.04(b)
313(c). . . . . . . . . . . . . . . . . . . . . . 5.04(a)
. . . . . . . . . . . . . . . . . . . . . . . . . 5.04(b)
313(d). . . . . . . . . . . . . . . . . . . . . . 5.04(c)
314(a). . . . . . . . . . . . . . . . . . . . . . 5.03
314(b). . . . . . . . . . . . . . . . . . . . . .Inapplicable
314(c). . . . . . . . . . . . . . . . . . . . . . 13.06(a)
314(d). . . . . . . . . . . . . . . . . . . . . .Inapplicable
314(e). . . . . . . . . . . . . . . . . . . . . . 13.06(b)
314(f). . . . . . . . . . . . . . . . . . . . . .Inapplicable
315(a). . . . . . . . . . . . . . . . . . . . . . 7.01(a)
. . . . . . . . . . . . . . . . . . . . . . . . . 7.02
315(b). . . . . . . . . . . . . . . . . . . . . . 6.07
315(c). . . . . . . . . . . . . . . . . . . . . . 7.01(a)
315(d). . . . . . . . . . . . . . . . . . . . . . 7.01(b)
315(e). . . . . . . . . . . . . . . . . . . . . . 6.08
316(a). . . . . . . . . . . . . . . . . . . . . . 6.06
. . . . . . . . . . . . . . . . . . . . . . . . . 8.04
316(b). . . . . . . . . . . . . . . . . . . . . . 6.04
316(c). . . . . . . . . . . . . . . . . . . . . . 8.01
317(a). . . . . . . . . . . . . . . . . . . . . . 6.02
317(b). . . . . . . . . . . . . . . . . . . . . . 4.03
318(a). . . . . . . . . . . . . . . . . . . . . . 13.08

TABLE OF CONTENTS

This Table of Contents does not constitute part of the
Indenture and should not have any bearing upon the interpretation
of any of its terms or provisions.

RECITALS:

Purpose of Indenture 1
Compliance with legal requirements . . . . . . . . . . . . . . 1
Purpose of and consideration for Indenture . . . . . . . . . . 1

ARTICLE ONE - DEFINITIONS

Section 1.01

Certain terms defined, other terms defined
in the Trust Indenture Act of 1939,
as amended, or by reference therein in
the Securities Act of 1933, as amended,
to have the meanings assigned therein

Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . . 2
Board Resolution. . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . . 3
Debenture or Debentures . . . . . . . . . . . . . . . . . . 3
Debentureholder . . . . . . . . . . . . . . . . . . . . . . 3
Default . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depository. . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default. . . . . . . . . . . . . . . . . . . . . . 4
Global Debenture. . . . . . . . . . . . . . . . . . . . . . 4
Governmental Obligations. . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . 5
Predecessor Debenture . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 6
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . 6
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . 7

ARTICLE TWO - ISSUE, DESCRIPTION,
TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES

Section 2.01
Designation, terms, amount, authentication and
delivery of Debentures. . . . . . . . . . . . . . . . . . 7

Section 2.02
Form of Debenture and Trustee's certificate . . . . . . . . 8

Section 2.03
Date and denominations of Debentures, and provisions
for payment of principal, premium and interest. . . . . . 9

Section 2.04
Execution of Debentures . . . . . . . . . . . . . . . . . . 10

Section 2.05
Exchange of Debentures
(a) Registration and transfer of Debentures . . . . . . . . 12
(b) Debenture Register; Debentures to be accompanied
by proper instruments of transfer . . . . . . . . . . . 12
(c) Charges upon exchange, transfer or registration
of Debentures . . . . . . . . . . . . . . . . . . . . . 12
(d) Restrictions on transfer or exchange at time of
redemption. . . . . . . . . . . . . . . . . . . . . . . 12

Section 2.06
Temporary Debentures. . . . . . . . . . . . . . . . . . . . 13

Section 2.07
Mutilated, destroyed, lost or stolen Debentures . . . . . . 13

Section 2.08
Cancellation of surrendered Debentures. . . . . . . . . . . 14

Section 2.09
Provisions of Indenture and Debentures for sole benefit
of parties and Debentureholders . . . . . . . . . . . . . 14

Section 2.10
Appointment of Authenticating Agent . . . . . . . . . . . . 14

Section 2.11
Global Debenture
(a) Authentication and Delivery; Legend . . . . . . . . . . 15
(b) Transfer of Global Debenture. . . . . . . . . . . . . . 15
(c) Issuance of Debentures in Definitive Form . . . . . . . 16

ARTICLE THREE - REDEMPTION OF
DEBENTURES AND SINKING FUND PROVISIONS

Section 3.01
Redemption of Debentures. . . . . . . . . . . . . . . . . . 16

Section 3.02
(a) Notice of redemption. . . . . . . . . . . . . . . . . . 16
(b) Selection of Debentures in case less than all
Debentures to be redeemed . . . . . . . . . . . . . . . 17

Section 3.03
(a) When Debentures called for redemption become due
and payable . . . . . . . . . . . . . . . . . . . . . . 18
(b) Receipt of new Debenture upon partial payment . . . . . 18

Section 3.04
Sinking Fund for Debentures . . . . . . . . . . . . . . . . 18

Section 3.05
Satisfaction of Sinking Fund Payments with Debentures . . . 19

Section 3.06
Redemption of Debentures for Sinking Fund . . . . . . . . . 19

ARTICLE FOUR - PARTICULAR
COVENANTS OF THE COMPANY

Section 4.01
Payment of principal (and premium if any) and interest
on Debentures . . . . . . . . . . . . . . . . . . . . . . 19

Section 4.02
Maintenance of office or agency for payment of
Debentures, designation of office or agency for
payment, registration, transfer and exchange
of Debentures . . . . . . . . . . . . . . . . . . . . . . 19

Section 4.03
(a) Duties of paying agent. . . . . . . . . . . . . . . . . 20
(b) Company as paying agent . . . . . . . . . . . . . . . . 20
(c) Holding sums in trust . . . . . . . . . . . . . . . . . 21

Section 4.04
Appointment to fill vacancy in office of Trustee. . . . . . 21

Section 4.05
Restriction on consolidation, merger or sale. . . . . . . . 21

ARTICLE FIVE - DEBENTUREHOLDERS'
LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE

Section 5.01
Company to furnish Trustee information as to names
and addresses of Debentureholders . . . . . . . . . . . . 21

Section 5.02
(a) Trustee to preserve information as to names and
addresses of Debentureholders received by it in
capacity of paying agent. . . . . . . . . . . . . . . . 22
(b) Trustee may destroy list of Debentureholders on
certain conditions. . . . . . . . . . . . . . . . . . . 22
(c) Trustee to make information as to names and
addresses of Debentureholders available to
"applicants" to mail communications to Deben-
tureholders in certain circumstances. . . . . . . . . . 22
(d) Procedure if Trustee elects not to make information
available to applicants . . . . . . . . . . . . . . . . 22
(e) Company and Trustee not accountable for disclosure
of information. . . . . . . . . . . . . . . . . . . . . 23

Section 5.03
(a) Annual and other reports to be filed by Company
with Trustee. . . . . . . . . . . . . . . . . . . . . . 23
(b) Additional information and reports to be filed with
Trustee and Securities and Exchange Commission. . . . . 23
(c) Summaries of information and reports to be trans-
mitted by Company to Debentureholders . . . . . . . . . 23
(d) Annual Certificate to be furnished to Trustee . . . . . 24

Section 5.04
(a) Trustee to transmit annual report to
Debentureholders. . . . . . . . . . . . . . . . . . . . 24
(b) Trustee to transmit certain further reports to
Debentureholders. . . . . . . . . . . . . . . . . . . . 25
(c) Copies of reports to be filed with stock exchanges
and Securities and Exchange Commission. . . . . . . . . 25

ARTICLE SIX - REMEDIES OF THE
TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT

Section 6.01
(a) Events of default defined . . . . . . . . . . . . . . . 25
(b) Acceleration of maturity upon Event of Default. . . . . 27
(c) Waiver of default and rescission of declaration
of maturity . . . . . . . . . . . . . . . . . . . . . . 27
(d) Restoration of former position and rights upon
curing default. . . . . . . . . . . . . . . . . . . . . 27

Section 6.02
(a) Covenant of Company to pay to Trustee whole amount
due on Debentures on default in payment of
interest or principal (and premium, if any) . . . . . . 28
(b) Trustee may recover judgment for whole amount due
on Debentures on failure of Company to pay. . . . . . . 28
(c) Billing of proof of claim by Trustee in bankruptcy,
reorganization or receivership proceeding . . . . . . . 28
(d) Rights of action and of asserting claims may be
enforced by Trustee without possession of
Debentures. . . . . . . . . . . . . . . . . . . . . . . 29

Section 6.03
Application of monies collected by Trustee. . . . . . . . . 29

Section 6.04
Limitation on suits by holders of Debentures. . . . . . . . 30

Section 6.05
(a) Remedies Cumulative . . . . . . . . . . . . . . . . . . 30
(b) Delay or omission in exercise of rights not waiver
of default. . . . . . . . . . . . . . . . . . . . . . . 31

Section 6.06
Rights of holders of majority in principal amount of
Debentures to direct trustee and to waive defaults. . . . 31

Section 6.07
Trustees to give notice of defaults known to it, but
may withhold in certain circumstances . . . . . . . . . . 31

Section 6.08
Requirements of an undertaking to pay costs in certain
suits under Indenture or against Trustee. . . . . . . . . 32

ARTICLE SEVEN - CONCERNING THE TRUSTEE

Section 7.01
(a) Upon Event of Default occurring and continuing,
Trustee shall exercise powers vested in it, and
use same degree of care and skill in their exercise,
as prudent individual will use. . . . . . . . . . . . . 32
(b) Trustee not relieved from liability for negligence
or willful misconduct except as provided in this
section . . . . . . . . . . . . . . . . . . . . . . . . 33
(1) Prior to Event of Default and after the curing
of all Events of Default which may have occurred
(i) Trustee not liable except for performance
of duties specifically set forth
(ii) In absence of bad faith, Trustee may con-
clusively rely on certificates or opinions
furnished it hereunder, subject to duty to
examine the same if specifically required
to be furnished to it
(2) Trustee not liable for error of judgment made
in good faith by Responsible Officer unless
Trustee negligent
(3) Trustee not liable for action or non-action in
accordance with direction of holders of majority
in principal amount of Debentures
(4) Trustee need not expend own funds without
adequate indemnity

Section 7.02
Subject to provisions of Section 7.01:
(a) Trustee may rely on documents believed genuine and
properly signed or presented. . . . . . . . . . . . . .34
(b) Sufficient evidence by certain instruments
provided for. . . . . . . . . . . . . . . . . . . . . .34
(c) Trustee may consult with counsel and act on advice
or Opinion of Counsel . . . . . . . . . . . . . . . . .34
(d) Trustee may require indemnity from Debentureholders . .34
(e) Trustee not liable for actions in good faith
believed to be authorized . . . . . . . . . . . . . . .35
(f) Trustee not bound to investigate facts or matters
stated in certificates, etc. unless requested in
writing by Debentureholders . . . . . . . . . . . . . .35
(g) Trustee may perform duties directly or through
agents or attorneys . . . . . . . . . . . . . . . . . .35

Section 7.03
(a) Trustee not liable for recitals in Indenture or
in Debentures . . . . . . . . . . . . . . . . . . . . .35
(b) No representations by Trustee as to validity or
Indenture or of Debentures. . . . . . . . . . . . . . .35
(c) Trustee not accountable for use of Debentures
or proceeds . . . . . . . . . . . . . . . . . . . . . .35

Section 7.04
Trustee, paying agent or Debenture Registrar may own
Debentures . . . . . . . . . . . . . . . . . . . . . . .35

Section 7.05
Monies received by Trustee to be held in Trust
without interest. . . . . . . . . . . . . . . . . . . . .35

Section 7.06
(a) Trustee entitled to compensation, reimbursement
and indemnity . . . . . . . . . . . . . . . . . . . . .36
(b) Obligations to Trustee to be secured by lien
prior to Debentures . . . . . . . . . . . . . . . . . .36

Section 7.07
Right of Trustee to rely on certificate of officers of
Company where no other evidence specifically prescribed .36

Section 7.08
Trustee acquiring conflicting interest to eliminate
conflict or resign. . . . . . . . . . . . . . . . . . . .36

Section 7.09
Requirements for eligibility of trustee . . . . . . . . . .37

Section 7.10
(a) Resignation of Trustee and appointment of successor . .37
(b) Removal of Trustee by Company or by court on
Debentureholders' application . . . . . . . . . . . . .37
(c) Removal of Trustee by holders of majority in
principal amount of Debentures. . . . . . . . . . . . .38
(d) Time when resignation or removal of Trustee
effective . . . . . . . . . . . . . . . . . . . . . . .38
(e) One Trustee for each series . . . . . . . . . . . . . .38

Section 7.11
(a) Acceptance by successor Trustee . . . . . . . . . . . .38
(b) Trustee with respect to less than all series. . . . . .39
(c) Company to confirm Trustee's rights . . . . . . . . . .39
(d) Successor Trustee to be qualified . . . . . . . . . . .40
(e) Notice of succession. . . . . . . . . . . . . . . . . .40

Section 7.12
Successor to Trustee by merger, consolidation of
succession to business. . . . . . . . . . . . . . . . . .40

Section 7.13
Limitations on rights of Trustee as a creditor to
obtain payment of certain claims. . . . . . . . . . . . .40

ARTICLE EIGHT - CONCERNING THE DEBENTUREHOLDERS

Section 8.01
Evidence of action by Debentureholders. . . . . . . . . . .40

Section 8.02
Proof of execution of instruments and of holding of
Debentures . . . . . . . . . . . . . . . . . . . . . . .41

Section 8.03
Who may be deemed owners of Debentures. . . . . . . . . . .41

Section 8.04
Debentures owned by Company or controlled or controlling
companies disregarded for certain purposes. . . . . . . .42

Section 8.05
Instruments executed by Debentureholders bind future
holders . . . . . . . . . . . . . . . . . . . . . . .42

ARTICLE NINE - SUPPLEMENTAL INDENTURES

Section 9.01
Purposes for which supplemental indenture may be entered
into without consent of Debentureholders. . . . . . . . .42

Section 9.02
Modification of Indenture with consent of
Debentureholders. . . . . . . . . . . . . . . . . . . . .44

Section 9.03
Effect of supplemental indentures . . . . . . . . . . . . .44

Section 9.04
Debentures may bear notation of changes by supplemental
indentures . . . . . . . . . . . . . . . . . . . . . . .45

Section 9.05
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . .45

ARTICLE TEN - CONSOLIDATION, MERGER AND SALE

Section 10.01
Consolidations or mergers of Company and sales or
conveyances of property of Company permitted. . . . . . .45

Section 10.02
(a) Rights and duties of successor company. . . . . . . . .46
(b) Appropriate changes may be made in phraseology
and form of Debentures. . . . . . . . . . . . . . . . .46
(c) Company may consolidate or merge into itself or
acquire properties of other corporations. . . . . . . .46

Section 10.03
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . .46

ARTICLE ELEVEN - SATISFACTION AND DISCHARGE
OF INDENTURE: UNCLAIMED MONIES

Section 11.01
Satisfaction and discharge of Indenture . . . . . . . . . .47

Section 11.02
Application by Trustee of funds deposited for payment
of Debentures . . . . . . . . . . . . . . . . . . . . . .47

Section 11.03
Repayment of monies held by paying agent. . . . . . . . . .48

Section 11.04
Repayment of monies held by Trustee . . . . . . . . . . . .48

ARTICLE TWELVE - IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 12.01
Incorporators, Stockholders, officers and directors of
Company exempt from individual liability. . . . . . . . .48

ARTICLE THIRTEEN - MISCELLANEOUS PROVISIONS

Section 13.01
Successors and assigns of Company bound by Indenture. . . .49

Section 13.02
Acts of board, committee or officer of successor
company valid . . . . . . . . . . . . . . . . . . . . . .49

Section 13.03
Surrender of powers by Company. . . . . . . . . . . . . . .49

Section 13.04
Required notices or demands may by served by mail . . . . .49

Section 13.05
Indenture and Debentures to be construed in accordance
with laws of the State of New York. . . . . . . . . . . .49

Section 13.06
(a) Officers' Certificate and Opinion of Counsel to be
furnished upon applications or demands by company . . .49
(b) Statements to be included in each certificate or
opinion with respect to compliance with condition
or covenant . . . . . . . . . . . . . . . . . . . . . .50

Section 13.07
Payments due on non-business days . . . . . . . . . . . . .50

Section 13.08
Provisions required by Trust Indenture Act of 1939
to control . . . . . . . . . . . . . . . . . . . . . . .50

Section 13.09
Indenture may be executed in counterparts . . . . . . . . .50

Section 13.10
Separability of Indenture provisions. . . . . . . . . . . .50

Section 13.11
Assignment by Company to subsidiary . . . . . . . . . . . .51

ARTICLE FOURTEEN - SUBORDINATION OF DEBENTURES

Section 14.01
Agreement of Subordination. . . . . . . . . . . . . . . . .51

Section 14.02
Limitations on payments to Debentureholders . . . . . . . .51

Section 14.03
Payments in bankruptcy. . . . . . . . . . . . . . . . . . .52

Section 14.04
Subrogation of Debentures . . . . . . . . . . . . . . . . .53

Section 14.05
Authorization by Debentureholders . . . . . . . . . . . . .54

Section 14.06
Notice to Trustee . . . . . . . . . . . . . . . . . . . . .54

Section 14.07
Trustee's relation to Senior Indebtedness . . . . . . . . .55

Section 14.08
Acts of holders of Senior Indebtedness. . . . . . . . . . .55

ACCEPTANCE OF TRUST BY TRUSTEE . . . . . . . . . . . . . . . .56

TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . .56

SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . .56

ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . .57

THIS INDENTURE, dated as of the 1st day of March, 1996,
between INDIANA MICHIGAN POWER COMPANY, a corporation duly
organized and existing under the laws of the State of Indiana
(hereinafter sometimes referred to as the "Company"), and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association organized
and existing under the laws of the United States, as trustee
(hereinafter sometimes referred to as the "Trustee"):

WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to
provide for the issuance of unsecured debentures (hereinafter
referred to as the "Debentures"), in an unlimited aggregate
principal amount to be issued from time to time in one or more
series as in this Indenture provided, as registered Debentures
without coupons, to be authenticated by the certificate of the
Trustee;

WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution of this Indenture;

WHEREAS, the Debentures and the certificate of authentication
to be borne by the Debentures (the "Certificate of Authentication")
are to be substantially in such forms as may be approved by the
Board of Directors (as defined below) or set forth in any indenture
supplemental to this Indenture;

AND WHEREAS, all acts and things necessary to make the
Debentures issued pursuant hereto, when executed by the Company and
authenticated and delivered by the Trustee as in this Indenture
provided, the valid, binding and legal obligations of the Company,
and to constitute these presents a valid indenture and agreement
according to its terms, have been done and performed or will be
done and performed prior to the issuance of such Debentures, and
the execution of this Indenture has been and the issuance hereunder
of the Debentures has been or will be prior to issuance in all
respects duly authorized, and the Company, in the exercise of the
legal right and power in it vested, executes this Indenture and
proposes to make, execute, issue and deliver the Debentures;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to declare the terms and conditions upon which
the Debentures are and are to be authenticated, issued and
delivered, and in consideration of the premises, of the purchase
and acceptance of the Debentures by the holders thereof and of the
sum of one dollar ($1.00) to it duly paid by the Trustee at the
execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee,
for the equal and proportionate benefit (subject to the provisions
of this Indenture) of the respective holders from time to time of
the Debentures, without any discrimination, preference or priority
of any one Debenture over any other by reason of priority in the
time of issue, sale or negotiation thereof, or otherwise, except as
provided herein, as follows:

ARTICLE ONE

DEFINITIONS

SECTION 1.01. The terms defined in this Section (except as in
this Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture, any
resolution of the Board of Directors of the Company and of any
indenture supplemental hereto shall have the respective meanings
specified in this Section. All other terms used in this Indenture
which are defined in the Trust Indenture Act of 1939, as amended,
or which are by reference in such Act defined in the Securities Act
of 1933, as amended (except as herein otherwise expressly provided
or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this
instrument.

Affiliate:

The term "Affiliate" of the Company shall mean any company at least
a majority of whose outstanding voting stock shall at the time be
owned by the Company, or by one or more direct or indirect
subsidiaries of or by the Company and one or more direct or
indirect subsidiaries of the Company. For the purposes only of
this definition of the term "Affiliate", the term "voting stock",
as applied to the stock of any company, shall mean stock of any
class or classes having ordinary voting power for the election of
a majority of the directors of such company, other than stock
having such power only by reason of the occurrence of a
contingency.

Authenticating Agent:

The term "Authenticating Agent" shall mean an authenticating agent
with respect to all or any of the series of Debentures, as the case
may be, appointed with respect to all or any series of the
Debentures, as the case may be, by the Trustee pursuant to Section
2.10.

Board of Directors:

The term "Board of Directors" shall mean the Board of Directors of
the Company, or any duly authorized committee of such Board.

Board Resolution:

The term "Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company
to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification.

Business Day:

The term "business day", with respect to any series of Debentures,
shall mean any day other than a day on which banking institutions
in the Borough of Manhattan, the City and State of New York, are
authorized or obligated by law or executive order to close.

Certificate:

The term "Certificate" shall mean a certificate signed by the
Chairman of the Board, the President, any Vice President, the
Treasurer or any Assistant Treasurer of the Company. The
Certificate need not comply with the provisions of Section 13.06.

Company:

The term "Company" shall mean Indiana Michigan Power Company, a
corporation duly organized and existing under the laws of the State
of Indiana, and, subject to the provisions of Article Ten, shall
also include its successors and assigns.

Corporate Trust Office:

The term "Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at The First
National Bank of Chicago, One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust
Administration.

Debenture or Debentures:

The term "Debenture" or "Debentures" shall mean any Debenture or
Debentures, as the case may be, authenticated and delivered under
this Indenture.

Debentureholder:

The term "Debentureholder", "holder of Debentures", "registered
holder", or other similar term, shall mean the person or persons in
whose name or names a particular Debenture shall be registered on
the books of the Company kept for that purpose in accordance with
the terms of this Indenture.

Default:

The term "Default" shall mean any event, act or condition which
with notice or lapse of time, or both, would constitute an Event of
Default.

Depository:

The term "Depository" shall mean, with respect to Debentures of any
series, for which the Company shall determine that such Debentures
will be issued as a Global Debenture, The Depository Trust Company,
New York, New York, another clearing agency, or any successor
registered as a clearing agency under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or other applicable
statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.

Event of Default:

The term "Event of Default" with respect to Debentures of a
particular series shall mean any event specified in Section 6.01,
continued for the period of time, if any, therein designated.

Global Debenture:

The term "Global Debenture" shall mean, with respect to any series
of Debentures, a Debenture executed by the Company and delivered by
the Trustee to the Depository or pursuant to the Depository's
instruction, all in accordance with the Indenture, which shall be
registered in the name of the Depository or its nominee.

Governmental Obligations:

The term "Governmental Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account
of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the
Governmental Obligation or the specific payment of principal of or
interest on the Governmental Obligation evidenced by such
depository receipt.

Indenture:

The term "Indenture" shall mean this instrument as originally
executed, or, if amended or supplemented as herein provided, as so
amended or supplemented.

Interest Payment Date:

The term "Interest Payment Date" when used with respect to any
installment of interest on a Debenture of a particular series shall
mean the date specified in such Debenture or in a Board Resolution
or in an indenture supplemental hereto with respect to such series
as the fixed date on which an installment of interest with respect
to Debentures of that series is due and payable.

Officers' Certificate:

The term "Officers' Certificate" shall mean a certificate signed by
the Chairman of the Board, the President, a Vice President, its
Treasurer or an Assistant Treasurer and the Secretary or an
Assistant Secretary of the Company. Each such certificate shall
include the statements provided for in Section 13.06, if and to the
extent required by the provisions thereof.

Opinion of Counsel:

The term "Opinion of Counsel" shall mean an opinion in writing
signed by legal counsel, who may be an employee of or counsel for
the Company. Each such opinion shall include the statements
provided for in Section 13.06, if and to the extent required by the
provisions thereof.

Outstanding:

The term "outstanding", when used with reference to Debentures of
any series, shall, subject to the provisions of Section 8.04, mean,
as of any particular time, all Debentures of that series
theretofore authenticated and delivered by the Trustee under this
Indenture, except (a) Debentures theretofore canceled by the
Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or which have previously been
canceled; (b) Debentures or portions thereof for the payment or
redemption of which monies or Governmental Obligations in the
necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided, however, that
if such Debentures or portions of such Debentures are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; and (c) Debentures in lieu of or in substitution for which
other Debentures shall have been authenticated and delivered
pursuant to the terms of Section 2.07.

Predecessor Debenture:

The term "Predecessor Debenture" of any particular Debenture shall
mean every previous Debenture evidencing all or a portion of the
same debt as that evidenced by such particular Debenture; and, for
the purposes of this definition, any Debenture authenticated and
delivered under Section 2.07 in lieu of a lost, destroyed or stolen
Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.

Responsible Officer:

The term "Responsible Officer" when used with respect to the
Trustee shall mean the chairman of the board of directors, the
president, any vice president, the secretary, the treasurer, any
trust officer, any corporate trust officer or any other officer or
assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter
is referred because of his or her knowledge of and familiarity with
the particular subject.

Senior Indebtedness:

The term "Senior Indebtedness" of the Company shall mean the
principal of, premium, if any, interest on and any other payment
due pursuant to any of the following, whether outstanding at the
date of execution of this Indenture or thereafter incurred, created
or assumed: (a) all indebtedness of the Company evidenced by notes,
debentures, bonds or other securities sold by the Company for money
or other obligations for money borrowed; (b) all indebtedness of
others of the kinds described in the preceding clause (a) assumed
by or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase,
contingent or otherwise; (c) all installment purchase agreements
entered into by the Company in connection with revenue bonds issued
by an agency or political subdivision of a state of the United
States of America; and (d) all renewals, extensions or refundings
of indebtedness of the kinds described in either of the preceding
clauses (a), (b) and (c) unless, in the case of any particular
indebtedness, renewal, extension or refunding, the instrument
creating or evidencing the same or the assumption or guarantee of
the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is
pari passu with the Debentures.

Subsidiary:

The term "Subsidiary" shall mean any corporation at least a
majority of whose outstanding voting stock shall at the time be
owned by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries. For the purposes only of
this definition of the term "Subsidiary", the term "voting stock",
as applied to the stock of any corporation, shall mean stock of any
class or classes having ordinary voting power for the election of
a majority of the directors of such corporation, other than stock
having such power only by reason of the occurrence of a
contingency.

Trustee:

The term "Trustee" shall mean The First National Bank of Chicago,
and, subject to the provisions of Article Seven, shall also include
its successors and assigns, and, if at any time there is more than
one person acting in such capacity hereunder, "Trustee" shall mean
each such person. The term "Trustee" as used with respect to a
particular series of the Debentures shall mean the trustee with
respect to that series.

Trust Indenture Act:

The term "Trust Indenture Act", subject to the provisions of
Sections 9.01, 9.02, and 10.01, shall mean the Trust Indenture Act
of 1939, as amended and in effect at the date of execution of this
Indenture.

ARTICLE TWO

ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBENTURES

SECTION 2.01. The aggregate principal amount of Debentures
which may be authenticated and delivered under this Indenture is
unlimited.

The Debentures may be issued in one or more series up to the
aggregate principal amount of Debentures of that series from time
to time authorized by or pursuant to a Board Resolution or pursuant
to one or more indentures supplemental hereto, prior to the initial
issuance of Debentures of a particular series. Prior to the
initial issuance of Debentures of any series, there shall be
established in or pursuant to a Board Resolution, and set forth in
an Officers' Certificate, or established in one or more indentures
supplemental hereto:

(1) the title of the Debentures of the series (which
shall distinguish the Debentures of the series from all other
Debentures);

(2) any limit upon the aggregate principal amount of the
Debentures of that series which may be authenticated and
delivered under this Indenture (except for Debentures
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Debentures of that
series);

(3) the date or dates on which the principal of the
Debentures of the series is payable;

(4) the rate or rates at which the Debentures of the
series shall bear interest or the manner of calculation of
such rate or rates, if any;

(5) the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest will
be payable or the manner of determination of such Interest
Payment Dates and the record date for the determination of
holders to whom interest is payable on any such Interest
Payment Dates;

(6) the right, if any, to extend the interest payment
periods and the duration of such extension;

(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which,
Debentures of the series may be redeemed, in whole or in part,
at the option of the Company;

(8) the obligation, if any, of the Company to redeem or
purchase Debentures of the series pursuant to any sinking fund
or analogous provisions (including payments made in cash in
anticipation of future sinking fund obligations) or at the
option of a holder thereof and the period or periods within
which, the price or prices at which, and the terms and
conditions upon which, Debentures of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;

(9) the form of the Debentures of the series including
the form of the Certificate of Authentication for such series;

(10) if other than denominations of $25 or any integral
multiple thereof, the denominations in which the Debentures of
the series shall be issuable;

(11) any and all other terms with respect to such series
(which terms shall not be inconsistent with the terms of this
Indenture); and

(12) whether the Debentures are issuable as a Global
Debenture and, in such case, the identity for the Depository
for such series.

All Debentures of any one series shall be substantially
identical except as to denomination and except as may otherwise be
provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.

If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at
or prior to the delivery of the Officers' Certificate setting forth
the terms of the series.

SECTION 2.02. The Debentures of any series and the Trustee's
certificate of authentication to be borne by such Debentures shall
be substantially of the tenor and purport as set forth in one or
more indentures supplemental hereto or as provided in a Board
Resolution and as set forth in an Officers' Certificate, and may
have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed
or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may
be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange on which Debentures of that series may be listed, or to
conform to usage.

SECTION 2.03. The Debentures shall be issuable as registered
Debentures and in the denominations of $25 or any integral multiple
thereof, subject to Section 2.01(10). The Debentures of a
particular series shall bear interest payable on the dates and at
the rate or rates specified with respect to that series. The
principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United
States of America which at the time is legal tender for public and
private debt, at the office or agency of the Company maintained for
that purpose. Each Debenture shall be dated the date of its
authentication.

The interest installment on any Debenture which is payable,
and is punctually paid or duly provided for, on any Interest
Payment Date for Debentures of that series shall be paid to the
person in whose name said Debenture (or one or more Predecessor
Debentures) is registered at the close of business on the regular
record date for such interest installment, except that interest
payable on redemption or maturity shall be payable as set forth in
the Officers' Certificate or indenture supplemental hereto
establishing the terms of such series of Debentures.

Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date
for Debentures of the same series (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered
holder on the relevant regular record date by virtue of having been
such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2)
below:

(1) The Company may make payment of any Defaulted
Interest on Debentures to the persons in whose names such
Debentures (or their respective Predecessor Debentures) are
registered at the close of business on a special record date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debenture and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to
the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be
mailed, first class postage prepaid, to each Debentureholder
at his or her address as it appears in the Debenture Register
(as hereinafter defined), not less than 10 days prior to such
special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having
been mailed as aforesaid, such Defaulted Interest shall be
paid to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered on such
special record date and shall be no longer payable pursuant to
the following clause (2).

(2) The Company may make payment of any Defaulted
Interest on any Debentures in any other lawful manner not
inconsistent with the requirements of any securities exchange
on which such Debentures may be listed, and upon such notice
as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed
practicable by the Trustee.

Unless otherwise set forth in a Board Resolution or one or
more indentures supplemental hereto establishing the terms of any
series of Debentures pursuant to Section 2.01 hereof, the term
"regular record date" as used in this Section with respect to a
series of Debentures with respect to any Interest Payment Date for
such series shall mean either the fifteenth day of the month
immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall
occur, if such Interest Payment Date is the first day of a month,
or the last day of the month immediately preceding the month in
which an Interest Payment Date established for such series pursuant
to Section 2.01 hereof shall occur, if such Interest Payment Date
is the fifteenth day of a month, whether or not such date is a
business day.

Subject to the foregoing provisions of this Section, each
Debenture of a series delivered under this Indenture upon transfer
of or in exchange for or in lieu of any other Debenture of such
series shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Debenture.

SECTION 2.04. The Debentures shall, subject to the provisions
of Section 2.06, be printed on steel engraved borders or fully or
partially engraved, or legibly typed, as the proper officers of the
Company may determine, and shall be signed on behalf of the Company
by its Chairman of the Board, its President, one of its Vice
Presidents or its Treasurer, under its corporate seal attested by
its Secretary or one of its Assistant Secretaries. The signature
of the Chairman of the Board, the President, a Vice President or
the Treasurer and/or the signature of the Secretary or an Assistant
Secretary in attestation of the corporate seal, upon the
Debentures, may be in the form of a facsimile signature of a
present or any future Chairman of the Board, President, Vice
President or Treasurer and of a present or any future Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on
the Debentures and for that purpose the Company may use the
facsimile signature of any person who shall have been a Chairman of
the Board, President, Vice President or Treasurer, or of any person
who shall have been a Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such person shall have
ceased to be the Chairman of the Board, President, Vice President
or Treasurer, or the Secretary or an Assistant Secretary, of the
Company, as the case may be. The seal of the Company may be in the
form of a facsimile of the seal of the Company and may be
impressed, affixed, imprinted or otherwise reproduced on the
Debentures.

Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such
Debentures, executed manually by an authorized signatory of the
Trustee, or by any Authenticating Agent with respect to such
Debentures, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. Such certificate executed
by the Trustee, or by any Authenticating Agent appointed by the
Trustee with respect to such Debentures, upon any Debenture
executed by the Company shall be conclusive evidence that the
Debenture so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits
of this Indenture.

At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures of
any series executed by the Company to the Trustee for
authentication, together with a written order of the Company for
the authentication and delivery of such Debentures, signed by its
Chairman of the Board, President or any Vice President or Treasurer
and its Secretary or any Assistant Secretary, and the Trustee in
accordance with such written order shall authenticate and deliver
such Debentures.

In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such
Debentures, the Trustee shall be entitled to receive, and (subject
to Section 7.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the form and terms thereof have
been established in conformity with the provisions of this
Indenture.

The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this
Indenture will affect the Trustee's own rights, duties or
immunities under the Debentures and this Indenture or otherwise in
a manner which is not reasonably acceptable to the Trustee.

SECTION 2.05. (a) Debentures of any series may be exchanged
upon presentation thereof at the office or agency of the Company
designated for such purpose, for other Debentures of such series of
authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this
Section. In respect of any Debentures so surrendered for exchange,
the Company shall execute, the Trustee shall authenticate and such
office or agency shall deliver in exchange therefor the Debenture
or Debentures of the same series which the Debentureholder making
the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.

(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose in the Borough of
Manhattan, the City and State of New York, or such other location
designated by the Company a register or registers (herein referred
to as the "Debenture Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall
register the Debentures and the transfers of Debentures as in this
Article provided and which at all reasonable times shall be open
for inspection by the Trustee. The registrar for the purpose of
registering Debentures and transfer of Debentures as herein
provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").

Upon surrender for transfer of any Debenture at the office or
agency of the Company designated for such purpose in the Borough of
Manhattan, the City and State of New York, or other location as
aforesaid, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in the name of
the transferee or transferees a new Debenture or Debentures of the
same series as the Debenture presented for a like aggregate
principal amount.

All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be
accompanied (if so required by the Company or the Debenture
Registrar) by a written instrument or instruments of transfer, in
form satisfactory to the Company or the Debenture Registrar, duly
executed by the registered holder or by his duly authorized
attorney in writing.

(c) No service charge shall be made for any exchange or
registration of transfer of Debentures, or issue of new Debentures
in case of partial redemption of any series, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not
involving any transfer.

(d) The Company shall not be required (i) to issue, exchange
or register the transfer of any Debentures during a period
beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the outstanding
Debentures of the same series and ending at the close of business
on the day of such mailing, nor (ii) to register the transfer of or
exchange any Debentures of any series or portions thereof called
for redemption. The provisions of this Section 2.05 are, with
respect to any Global Debenture, subject to Section 2.11 hereof.

SECTION 2.06. Pending the preparation of definitive
Debentures of any series, the Company may execute, and the Trustee
shall authenticate and deliver, temporary Debentures (printed,
lithographed or typewritten) of any authorized denomination, and
substantially in the form of the definitive Debentures in lieu of
which they are issued, but with such omissions, insertions and
variations as may be appropriate for temporary Debentures, all as
may be determined by the Company. Every temporary Debenture of any
series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Debentures of such
series. Without unnecessary delay the Company will execute and
will furnish definitive Debentures of such series and thereupon any
or all temporary Debentures of such series may be surrendered in
exchange therefor (without charge to the holders), at the office or
agency of the Company designated for the purpose, and the Trustee
shall authenticate and such office or agency shall deliver in
exchange for such temporary Debentures an equal aggregate principal
amount of definitive Debentures of such series, unless the Company
advises the Trustee to the effect that definitive Debentures need
not be executed and furnished until further notice from the
Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture
as definitive Debentures of such series authenticated and delivered
hereunder.

SECTION 2.07. In case any temporary or definitive Debenture
shall become mutilated or be destroyed, lost or stolen, the Company
(subject to the next succeeding sentence) shall execute, and upon
its request the Trustee (subject as aforesaid) shall authenticate
and deliver, a new Debenture of the same series bearing a number
not contemporaneously outstanding, in exchange and substitution for
the mutilated Debenture, or in lieu of and in substitution for the
Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company
and to the Trustee such security or indemnity as may be required by
them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the
Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the
ownership thereof. The Trustee may authenticate any such
substituted Debenture and deliver the same upon the written request
or authorization of any officer of the Company. Upon the issuance
of any substituted Debenture, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith. In case any Debenture which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of the same (without surrender thereof except
in the case of a mutilated Debenture) if the applicant for such
payment shall furnish to the Company and to the Trustee such
security or indemnity as they may require to save them harmless,
and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction,
loss or theft of such Debenture and of the ownership thereof.

Every Debenture issued pursuant to the provisions of this
Section in substitution for any Debenture which is mutilated,
destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Debenture shall be found at
any time, or be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any
and all other Debentures of the same series duly issued hereunder.
All Debentures shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other
securities without their surrender.

SECTION 2.08. All Debentures surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to the
Trustee for cancellation, or, if surrendered to the Trustee, shall
be canceled by it, and no Debentures shall be issued in lieu
thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company, the
Trustee shall deliver to the Company canceled Debentures held by
the Trustee. In the absence of such request the Trustee may
dispose of canceled Debentures in accordance with its standard
procedures and deliver a certificate of disposition to the Company.
If the Company shall otherwise acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for
cancellation.

SECTION 2.09. Nothing in this Indenture or in the Debentures,
express or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and the
holders of the Debentures, any legal or equitable right, remedy or
claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Debentures.

SECTION 2.10. So long as any of the Debentures of any series
remain outstanding there may be an Authenticating Agent for any or
all such series of Debentures which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to
act on behalf of the Trustee to authenticate Debentures of such
series issued upon exchange, transfer or partial redemption
thereof, and Debentures so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Debentures by
the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series except for authentication upon
original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as most
recently reported or determined by it, sufficient under the laws of
any jurisdiction under which it is organized or in which it is
doing business to conduct a trust business, and which is otherwise
authorized under such laws to conduct such business and is subject
to supervision or examination by Federal or State authorities. If
at any time any Authenticating Agent shall cease to be eligible in
accordance with these provisions it shall resign immediately.

Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the
Company. Upon resignation, termination or cessation of eligibility
of any Authenticating Agent, the Trustee may appoint an eligible
successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and
duties of its predecessor hereunder as if originally named as an
Authenticating Agent pursuant hereto.

SECTION 2.11. (a) If the Company shall establish pursuant to
Section 2.01 that the Debentures of a particular series are to be
issued as a Global Debenture, then the Company shall execute and
the Trustee shall, in accordance with Section 2.04, authenticate
and deliver, a Global Debenture which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal
amount of, all of the Outstanding Debentures of such series, (ii)
shall be registered in the name of the Depository or its nominee,
(iii) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Debenture may be
transferred, in whole but not in part, only to another nominee of
the Depository or to a successor Depository or to a nominee of such
successor Depository."

(b) Notwithstanding the provisions of Section 2.05, the
Global Debenture of a series may be transferred, in whole but not
in part and in the manner provided in Section 2.05, only to another
nominee of the Depository for such series, or to a successor
Depository for such series selected or approved by the Company or
to a nominee of such successor Depository.

(c) If at any time the Depository for a series of Debentures
notifies the Company that it is unwilling or unable to continue as
Depository for such series or if at any time the Depository for
such series shall no longer be registered or in good standing under
the Exchange Act, or other applicable statute or regulation and a
successor Depository for such series is not appointed by the
Company within 90 days after the Company receives such notice or
becomes aware of such condition, as the case may be, this Section
2.11 shall no longer be applicable to the Debentures of such series
and the Company will execute, and subject to Section 2.05, the
Trustee will authenticate and deliver Debentures of such series in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture of such series in exchange
for such Global Debenture. In addition, the Company may at any
time determine that the Debentures of any series shall no longer be
represented by a Global Debenture and that the provisions of this
Section 2.11 shall no longer apply to the Debentures of such
series. In such event the Company will execute, and subject to
Section 2.05, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and
deliver Debentures of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global
Debenture of such series in exchange for such Global Debenture.
Upon the exchange of the Global Debenture for such Debentures in
definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be canceled by the
Trustee. Such Debentures in definitive registered form issued in
exchange for the Global Debenture pursuant to this Section 2.11(c)
shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Debenture Registrar. The Trustee shall deliver such Debentures to
the Depository for delivery to the persons in whose names such
Debentures are so registered.

ARTICLE THREE

REDEMPTION OF DEBENTURES
AND SINKING FUND PROVISIONS

SECTION 3.01. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance
with the terms established for such series pursuant to Section 2.01
hereof.

SECTION 3.02. (a) In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a portion
of the Debentures of any series in accordance with the right
reserved so to do, it shall give notice of such redemption to
holders of the Debentures of such series to be redeemed by mailing,
first class postage prepaid, a notice of such redemption not less
than 30 days and not more than 60 days before the date fixed for
redemption of that series to such holders at their last addresses
as they shall appear upon the Debenture Register. Any notice which
is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the registered
holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for
redemption in whole or in part, or any defect in the notice, shall
not affect the validity of the proceedings for the redemption of
any other Debentures of such series or any other series. In the
case of any redemption of Debentures prior to the expiration of any
restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction.

Each such notice of redemption shall specify the date fixed
for redemption and the redemption price at which Debentures of that
series are to be redeemed, and shall state that payment of the
redemption price of such Debentures to be redeemed will be made at
the office or agency of the Company, upon presentation and
surrender of such Debentures, that interest accrued to the date
fixed for redemption will be paid as specified in said notice, that
from and after said date interest will cease to accrue and that the
redemption is for a sinking fund, if such is the case. If less
than all the Debentures of a series are to be redeemed, the notice
to the holders of Debentures of that series to be redeemed in whole
or in part shall specify the particular Debentures to be so
redeemed. In case any Debenture is to be redeemed in part only,
the notice which relates to such Debenture shall state the portion
of the principal amount thereof to be redeemed, and shall state
that on and after the redemption date, upon surrender of such
Debenture, a new Debenture or Debentures of such series in
principal amount equal to the unredeemed portion thereof will be
issued.

(b) If less than all the Debentures of a series are to be
redeemed, the Company shall give the Trustee at least 45 days'
notice in advance of the date fixed for redemption (unless the
Trustee shall agree to a shorter period) as to the aggregate
principal amount of Debentures of the series to be redeemed, and
thereupon the Trustee shall select, by lot or in such other manner
as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to
$25 or any integral multiple thereof, subject to Section 2.01(10))
of the principal amount of such Debentures of a denomination larger
than $25 (subject as aforesaid), the Debentures to be redeemed and
shall thereafter promptly notify the Company in writing of the
numbers of the Debentures to be redeemed, in whole or in part.

The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its Chairman of
the Board, its President, any Vice President or its Treasurer,
instruct the Trustee or any paying agent to call all or any part of
the Debentures of a particular series for redemption and to give
notice of redemption in the manner set forth in this Section, such
notice to be in the name of the Company or its own name as the
Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any
such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Debenture Register, transfer books
or other records, or suitable copies or extracts therefrom,
sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this
Section.

SECTION 3.03. (a) If the giving of notice of redemption
shall have been completed as above provided, the Debentures or
portions of Debentures of the series to be redeemed specified in
such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption and
interest on such Debentures or portions of Debentures shall cease
to accrue on and after the date fixed for redemption, unless the
Company shall default in the payment of such redemption price and
accrued interest with respect to any such Debenture or portion
thereof. On presentation and surrender of such Debentures on or
after the date fixed for redemption at the place of payment
specified in the notice, said Debentures shall be paid and redeemed
at the applicable redemption price for such series, together with
interest accrued thereon to the date fixed for redemption (but if
the date fixed for redemption is an interest payment date, the
interest installment payable on such date shall be payable to the
registered holder at the close of business on the applicable record
date pursuant to Section 2.03).

(b) Upon presentation of any Debenture of such series which
is to be redeemed in part only, the Company shall execute and the
Trustee shall authenticate and the office or agency where the
Debenture is presented shall deliver to the holder thereof, at the
expense of the Company, a new Debenture or Debentures of the same
series, of authorized denominations in principal amount equal to
the unredeemed portion of the Debenture so presented.

SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall be applicable to any sinking fund for the retirement of
Debentures of a series, except as otherwise specified as
contemplated by Section 2.01 for Debentures of such series.

The minimum amount of any sinking fund payment provided for by
the terms of Debentures of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such
minimum amount provided for by the terms of Debentures of any
series is herein referred to as an "optional sinking fund payment".
If provided for by the terms of Debentures of any series, the cash
amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be
applied to the redemption of Debentures of any series as provided
for by the terms of Debentures of such series.

SECTION 3.05. The Company (i) may deliver Outstanding
Debentures of a series (other than any previously called for
redemption) and (ii) may apply as a credit Debentures of a series
which have been redeemed either at the election of the Company
pursuant to the terms of such Debentures or through the application
of permitted optional sinking fund payments pursuant to the terms
of such Debentures, in each case in satisfaction of all or any part
of any sinking fund payment with respect to the Debentures of such
series required to be made pursuant to the terms of such Debentures
as provided for by the terms of such series; provided that such
Debentures have not been previously so credited. Such Debentures
shall be received and credited for such purpose by the Trustee at
the redemption price specified in such Debentures for redemption
through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.

SECTION 3.06. Not less than 45 days prior to each sinking
fund payment date for any series of Debentures, the Company will
deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by delivering and crediting Debentures of
that series pursuant to Section 3.05 and the basis for such credit
and will, together with such Officers' Certificate, deliver to the
Trustee any Debentures to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select
the Debentures to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.02 and cause notice of the
redemption thereof to be given in the name of and at the expense of
the Company in the manner provided in Section 3.02. Such notice
having been duly given, the redemption of such Debentures shall be
made upon the terms and in the manner stated in Section 3.03.

ARTICLE FOUR

PARTICULAR COVENANTS OF THE COMPANY

The Company covenants and agrees for each series of the
Debentures as follows:

SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any) and
interest on the Debentures of that series at the time and place and
in the manner provided herein and established with respect to such
Debentures.

SECTION 4.02. So long as any series of the Debentures remain
outstanding, the Company agrees to maintain an office or agency,
which if such series of Debentures is not outstanding as a Global
Debenture, shall be in the Borough of Manhattan, the City and State
of New York, with respect to each such series and at such other
location or locations as may be designated as provided in this
Section 4.02, where (i) Debentures of that series may be presented
for payment, (ii) Debentures of that series may be presented as
hereinabove authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of
the Debentures of that series and this Indenture may be given or
served, such designation to continue with respect to such office or
agency until the Company shall, by written notice signed by its
Chairman of the Board, its President, a Vice President or its
Treasurer and delivered to the Trustee, designate some other office
or agency for such purposes or any of them. If at any time the
Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such
presentations, notices and demands.

SECTION 4.03. (a) If the Company shall appoint one or more
paying agents for all or any series of the Debentures, other than
the Trustee, the Company will cause each such paying agent to
execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of
this Section:

(1) that it will hold all sums held by it as such agent
for the payment of the principal of (and premium, if any) or
interest on the Debentures of that series (whether such sums
have been paid to it by the Company or by any other obligor of
such Debentures) in trust for the benefit of the persons
entitled thereto;

(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor of such Debentures) to
make any payment of the principal of (and premium, if any) or
interest on the Debentures of that series when the same shall
be due and payable;

(3) that it will, at any time during the continuance of
any failure referred to in the preceding paragraph (a)(2)
above, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such paying agent;
and

(4) that it will perform all other duties of paying
agent as set forth in this Indenture.

(b) If the Company shall act as its own paying agent with
respect to any series of the Debentures, it will on or before each
due date of the principal of (and premium, if any) or interest on
Debentures of that series, set aside, segregate and hold in trust
for the benefit of the persons entitled thereto a sum sufficient to
pay such principal (and premium, if any) or interest so becoming
due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of such action, or any failure (by it
or any other obligor on such Debentures) to take such action.
Whenever the Company shall have one or more paying agents for any
series of Debentures, it will, prior to each due date of the
principal of (and premium, if any) or interest on any Debentures of
that series, deposit with the paying agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due,
such sum to be held in trust for the benefit of the persons
entitled to such principal, premium or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.

(c) Anything in this Section to the contrary notwithstanding,
(i) the agreement to hold sums in trust as provided in this Section
is subject to the provisions of Section 11.04, and (ii) the Company
may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or
direct any paying agent to pay, to the Trustee all sums held in
trust by the Company or such paying agent, such sums to be held by
the Trustee upon the same terms and conditions as those upon which
such sums were held by the Company or such paying agent; and, upon
such payment by any paying agent to the Trustee, such paying agent
shall be released from all further liability with respect to such
money.

SECTION 4.04. The Company, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the
manner provided in Section 7.10, a Trustee, so that there shall at
all times be a Trustee hereunder.

SECTION 4.05. The Company will not, while any of the
Debentures remain outstanding, consolidate with, or merge into, or
merge into itself, or sell or convey all or substantially all of
its property to any other company unless the provisions of Article
Ten hereof are complied with.

ARTICLE FIVE

DEBENTUREHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE

SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) on each regular record date (as
defined in Section 2.03) a list, in such form as the Trustee may
reasonably require, of the names and addresses of the holders of
each series of Debentures as of such regular record date, provided,
that the Company shall not be obligated to furnish or cause to be
furnished such list at any time that the list shall not differ in
any respect from the most recent list furnished to the Trustee by
the Company and (b) at such other times as the Trustee may request
in writing within 30 days after the receipt by the Company of any
such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, no such list need be furnished for any series
for which the Trustee shall be the Debenture Registrar.

SECTION 5.02. (a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the
names and addresses of the holders of Debentures contained in the
most recent list furnished to it as provided in Section 5.01 and as
to the names and addresses of holders of Debentures received by the
Trustee in its capacity as Debenture Registrar (if acting in such
capacity).

(b) The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.

(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each such
applicant has owned a Debenture for a period of at least six months
preceding the date of such application, and such application states
that the applicants desire to communicate with other holders of
Debentures of such series or holders of all Debentures with respect
to their rights under this Indenture or under such Debentures, and
is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
Trustee shall, within five business days after the receipt of such
application, at its election, either:

(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 5.02; or

(2) inform such applicants as to the approximate number
of holders of Debentures of such series or of all Debentures,
as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee, in
accordance with the provisions of subsection (a) of this
Section 5.02, and as to the approximate cost of mailing to
such Debentureholders the form of proxy or other
communication, if any, specified in such application.

(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each holder of such series or
of all Debentures, as the case may be, whose name and address
appears in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section
5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a
tender to the Trustee of the material to be mailed and of payment,
or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee
shall mail to such applicants and file with the Securities and
Exchange Commission (the "Commission"), together with a copy of the
material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of Debentures of such series or of
all Debentures, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or
if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity
for hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of such
tender; otherwise, the Trustee shall be relieved of any obligation
or duty to such applicants respecting their application.

(e) Each and every holder of the Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of
the holders of Debentures in accordance with the provisions of
subsection (c) of this Section, regardless of the source from which
such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a
request made under said subsection (c).

SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 30 days after the Company is required to
file the same with the Commission, a copy of the annual reports and
of the information, documents and other reports (or a copy of such
portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to
either of such sections, then to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Exchange Act, in respect of a
security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.

(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by
the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations.

(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery
service which provides for evidence of receipt, to the
Debentureholders, as their names and addresses appear upon the
Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to subsections
(a) and (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.

(d) The Company covenants and agrees to furnish to the
Trustee, on or before May 15 in each calendar year in which any of
the Debentures are outstanding, or on or before such other day in
each calendar year as the Company and the Trustee may from time to
time agree upon, a certificate from the principal executive
officer, principal financial officer or principal accounting
officer of the Company as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture.
For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of
notice provided under this Indenture.

SECTION 5.04. (a) On or before July 15 in each year in which
any of the Debentures are outstanding, the Trustee shall transmit
by mail, first class postage prepaid, to the Debentureholders, as
their names and addresses appear upon the Debenture Register, a
brief report dated as of the preceding May 15, with respect to any
of the following events which may have occurred within the previous
twelve months (but if no such event has occurred within such period
no report need be transmitted):

(1) any change to its eligibility under Section 7.09,
and its qualifications under Section 7.08;

(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Section 310(b) of the Trust Indenture Act;

(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the
making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report, and for the reimbursement
of which it claims or may claim a lien or charge, prior to
that of the Debentures, on any property or funds held or
collected by it as Trustee if such advances so remaining
unpaid aggregate more than 1/2 of 1% of the principal amount
of the Debentures outstanding on the date of such report;

(4) any change to the amount, interest rate, and
maturity date of all other indebtedness owing by the Company,
or by any other obligor on the Debentures, to the Trustee in
its individual capacity, on the date of such report, with a
brief description of any property held as collateral security
therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in Section 7.13;

(5) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the
date of such report;

(6) any release, or release and substitution, of
property subject to the lien of this Indenture (and the
consideration thereof, if any) which it has not previously
reported;

(7) any additional issue of Debentures which the Trustee
has not previously reported; and

(8) any action taken by the Trustee in the performance
of its duties under this Indenture which it has not previously
reported and which in its opinion materially affects the
Debentures or the Debentures of any series, except any action
in respect of a default, notice of which has been or is to be
withheld by it in accordance with the provisions of Section
6.07.

(b) The Trustee shall transmit by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, a brief report with respect to
the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made
by the Trustee as such since the date of the last report
transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report has yet been so transmitted, since
the date of execution of this Indenture), for the reimbursement of
which it claims or may claim a lien or charge prior to that of the
Debentures of any series on property or funds held or collected by
it as Trustee, and which it has not previously reported pursuant to
this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of
such series outstanding at such time, such report to be transmitted
within 90 days after such time.

(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Debentures are
listed (if so listed) and also with the Commission. The Company
agrees to notify the Trustee when any Debentures become listed on
any stock exchange.

ARTICLE SIX

REMEDIES OF THE TRUSTEE AND
DEBENTUREHOLDERS ON EVENT OF DEFAULT

SECTION 6.01. (a) Whenever used herein with respect to
Debentures of a particular series, "Event of Default" means any one
or more of the following events which has occurred and is
continuing:

(1) default in the payment of any installment of
interest upon any of the Debentures of that series, as and
when the same shall become due and payable, and continuance of
such default for a period of 10 days; provided, however, that
a valid extension of an interest payment period by the Company
in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of
interest for this purpose;

(2) default in the payment of the principal of (or
premium, if any, on) any of the Debentures of that series as
and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in
any payment required by any sinking or analogous fund
established with respect to that series;

(3) failure on the part of the Company duly to observe
or perform any other of the covenants or agreements on the
part of the Company with respect to that series contained in
such Debentures or otherwise established with respect to that
series of Debentures pursuant to Section 2.01 hereof or
contained in this Indenture (other than a covenant or
agreement which has been expressly included in this Indenture
solely for the benefit of one or more series of Debentures
other than such series) for a period of 90 days after the date
on which written notice of such failure, requiring the same to
be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by
the Trustee, by registered or certified mail, or to the
Company and the Trustee by the holders of at least 25% in
principal amount of the Debentures of that series at the time
outstanding;

(4) a decree or order by a court having jurisdiction in
the premises shall have been entered adjudging the Company as
bankrupt or insolvent, or approving as properly filed a
petition seeking liquidation or reorganization of the Company
under the Federal Bankruptcy Code or any other similar
applicable Federal or State law, and such decree or order
shall have continued unvacated and unstayed for a period of 90
consecutive days; or an involuntary case shall be commenced
under such Code in respect of the Company and shall continue
undismissed for a period of 90 consecutive days or an order
for relief in such case shall have been entered; or a decree
or order of a court having jurisdiction in the premises shall
have been entered for the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or
liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall
have remained in force unvacated and unstayed for a period of
90 consecutive days; or

(5) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to
the filing of any such petition, or shall consent to the
appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors.

(b) In each and every such case, unless the principal of all
the Debentures of that series shall have already become due and
payable, either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Debentures of that series then
outstanding hereunder, by notice in writing to the Company (and to
the Trustee if given by such Debentureholders), may declare the
principal of all the Debentures of that series to be due and
payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything contained
in this Indenture or in the Debentures of that series or
established with respect to that series pursuant to Section 2.01
hereof to the contrary notwithstanding.

(c) Section 6.01(b), however, is subject to the condition
that if, at any time after the principal of the Debentures of that
series shall have been so declared due and payable, and before any
judgment or decree for the payment of the monies due shall have
been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that
series and the principal of (and premium, if any, on) any and all
Debentures of that series which shall have become due otherwise
than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of
interest, at the rate per annum expressed in the Debentures of that
series to the date of such payment or deposit) and the amount
payable to the Trustee under Section 7.06, and any and all defaults
under the Indenture, other than the nonpayment of principal on
Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section
6.06, then and in every such case the holders of a majority in
aggregate principal amount of the Debentures of that series then
outstanding, by written notice to the Company and to the Trustee,
may rescind and annul such declaration and its consequences with
respect to that series of Debentures; but no such rescission and
annulment shall extend to or shall affect any subsequent default,
or shall impair any right consequent thereon.

(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures of that series under this
Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other
reason or shall have been determined adversely to the Trustee, then
and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company and
the Trustee shall continue as though no such proceedings had been
taken.

SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of interest
on any of the Debentures of a series, or any payment required by
any sinking or analogous fund established with respect to that
series as and when the same shall have become due and payable, and
such default shall have continued for a period of 10 business days,
or (2) in case default shall be made in the payment of the
principal of (or premium, if any, on) any of the Debentures of a
series when the same shall have become due and payable, whether
upon maturity of the Debentures of a series or upon redemption or
upon declaration or otherwise, then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders
of the Debentures of that series, the whole amount that then shall
have become due and payable on all such Debentures for principal
(and premium, if any) or interest, or both, as the case may be,
with interest upon the overdue principal (and premium, if any) and
(to the extent that payment of such interest is enforceable under
applicable law and without duplication of any other amounts paid by
the Company in respect thereof) upon overdue installments of
interest at the rate per annum expressed in the Debentures of that
series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.

(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or
other obligor upon the Debentures of that series and collect in the
manner provided by law out of the property of the Company or other
obligor upon the Debentures of that series wherever situated the
monies adjudged or decreed to be payable.

(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition
or other judicial proceedings affecting the Company, any other
obligor on such Debentures, or the creditors or property of either,
the Trustee shall have power to intervene in such proceedings and
take any action therein that may be permitted by the court and
shall (except as may be otherwise provided by law) be entitled to
file such proofs of claim and other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee
and of the holders of Debentures of such series allowed for the
entire amount due and payable by the Company or such other obligor
under the Indenture at the date of institution of such proceedings
and for any additional amount which may become due and payable by
the Company or such other obligor after such date, and to collect
and receive any monies or other property payable or deliverable on
any such claim, and to distribute the same after the deduction of
the amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Debentures of such
series to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly
to such Debentureholders, to pay to the Trustee any amount due it
under Section 7.06.

(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Debentures of that series, may be enforced by the Trustee without
the possession of any of such Debentures, or the production thereof
at any trial or other proceeding relative thereto, and any such
suit or proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the
holders of the Debentures of such series.

In case of an Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in
it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of
such rights, either at law or in equity or in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by
law.

Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of
any Debentureholder any plan of reorganization, arrangement,
adjustment or composition affecting the Debentures of that series
or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such
proceeding.

SECTION 6.03. Any monies collected by the Trustee pursuant to
Section 6.02 with respect to a particular series of Debentures
shall be applied in the order following, at the date or dates fixed
by the Trustee and, in case of the distribution of such monies on
account of principal (or premium, if any) or interest, upon
presentation of the several Debentures of that series, and stamping
thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:

FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee under
Section 7.06;

SECOND: To the payment of the amounts then due and
unpaid upon Debentures of such series for principal (and
premium, if any) and interest, in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Debentures for principal (and
premium, if any) and interest, respectively; and

THIRD: To the Company.

SECTION 6.04. No holder of any Debenture of any series shall
have any right by virtue or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or
at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the
continuance thereof with respect to Debentures of such series
specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate principal
amount of the Debentures of such series then outstanding shall have
made written request upon the Trustee to institute such action,
suit or proceeding in its own name as trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity, shall have failed
to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by the
taker and holder of every Debenture of such series with every other
such taker and holder and the Trustee, that no one or more holders
of Debentures of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders
of any other of such Debentures, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce
any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all
holders of Debentures of such series. For the protection and
enforcement of the provisions of this Section, each and every
Debentureholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Debenture to receive
payment of the principal of (and premium, if any) and interest on
such Debenture, as therein provided, on or after the respective due
dates expressed in such Debenture (or in the case of redemption, on
the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such
holder.

SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Debentureholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of
any others thereof or of any other powers and remedies available to
the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance
of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debentures.

(b) No delay or omission of the Trustee or of any holder of
any of the Debentures to exercise any right or power accruing upon
any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject
to the provisions of Section 6.04, every power and remedy given by
this Article or by law to the Trustee or to the Debentureholders
may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Debentureholders.

SECTION 6.06. The holders of a majority in aggregate
principal amount of the Debentures of any series at the time
outstanding, determined in accordance with Section 8.04, shall have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to such
series; provided, however, that such direction shall not be in
conflict with any rule of law or with this Indenture or unduly
prejudicial to the rights of holders of Debentures of any other
series at the time outstanding determined in accordance with
Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount
of the Debentures of any series at the time outstanding affected
thereby, determined in accordance with Section 8.04, may on behalf
of the holders of all of the Debentures of such series waive any
past default in the performance of any of the covenants contained
herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the
principal of, or premium, if any, or interest on, any of the
Debentures of that series as and when the same shall become due by
the terms of such Debentures otherwise than by acceleration (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Trustee
(in accordance with Section 6.01(c))) or a call for redemption of
Debentures of that series. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of
this Indenture and the Company, the Trustee and the holders of the
Debentures of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.

SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series,
transmit by mail, first class postage prepaid, to the holders of
Debentures of that series, as their names and addresses appear upon
the Debenture Register, notice of all defaults with respect to that
series known to the Trustee, unless such defaults shall have been
cured or waived before the giving of such notice (the term
"defaults" for the purposes of this Section being hereby defined to
be the events specified in subsections (1), (2), (3), (4) and (5)
of Section 6.01(a), not including any periods of grace provided for
therein and irrespective of the giving of notice provided for by
subsection (3) of Section 6.01(a)); provided, that, except in the
case of default in the payment of the principal of (or premium, if
any) or interest on any of the Debentures of that series or in the
payment of any sinking or analogous fund installment established
with respect to that series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that
the withholding of such notice is in the interests of the holders
of Debentures of that series; provided further, that in the case of
any default of the character specified in Section 6.01(a)(3) with
respect to Debentures of such series no such notice to the holders
of the Debentures of that series shall be given until at least 30
days after the occurrence thereof.

The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under subsection (a)(1) or (a)(2) of
Section 6.01 as long as the Trustee is acting as paying agent for
such series of Debentures or (ii) any default as to which the
Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Indenture shall have
obtained written notice.

SECTION 6.08. All parties to this Indenture agree, and each
holder of any Debentures by his or her acceptance thereof shall be
deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders, holding more than
10% in aggregate principal amount of the outstanding Debentures of
any series, or to any suit instituted by any Debentureholder for
the enforcement of the payment of the principal of (or premium, if
any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established
pursuant to this Indenture.

ARTICLE SEVEN

CONCERNING THE TRUSTEE

SECTION 7.01. (a) The Trustee, prior to the occurrence of an
Event of Default with respect to Debentures of a series and after
the curing of all Events of Default with respect to Debentures of
that series which may have occurred, shall undertake to perform
with respect to Debentures of such series such duties and only such
duties as are specifically set forth in this Indenture, and no
implied covenants shall be read into this Indenture against the
Trustee. In case an Event of Default with respect to Debentures of
a series has occurred (which has not been cured or waived), the
Trustee shall exercise with respect to Debentures of that series
such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct,
except that:

(1) prior to the occurrence of an Event of Default with
respect to Debentures of a series and after the curing or
waiving of all such Events of Default with respect to that
series which may have occurred:

(i) the duties and obligations of the Trustee shall
with respect to Debentures of such series be determined
solely by the express provisions of this Indenture, and
the Trustee shall not be liable with respect to
Debentures of such series except for the performance of
such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and

(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to Debentures of
such series conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;

(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts;

(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than
a majority in principal amount of the Debentures of any series
at the time outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture with respect to the Debentures of
that series; and

(4) none of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if the Trustee reasonably believes that
the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate
indemnity against such risk is not reasonably assured to it.

SECTION 7.02. Except as otherwise provided in Section 7.01:

(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it
(i) to be genuine and (ii) to have been signed or presented by the
proper party or parties;

(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by
the Chairman of the Board, the President, any Vice President or the
Treasurer and by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer (unless other evidence in
respect thereof is specifically prescribed herein);

(c) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken or suffered or omitted hereunder in good faith and in
reliance thereon;

(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Debentureholders,
pursuant to the provisions of this Indenture, unless such
Debentureholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing
herein contained shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default with respect
to a series of the Debentures (which has not been cured or waived)
to exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his
own affairs;

(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;

(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security, or other papers or documents,
unless requested in writing so to do by the holders of not less
than a majority in principal amount of the outstanding Debentures
of the particular series affected thereby (determined as provided
in Section 8.04); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity
against such costs, expenses or liabilities as a condition to so
proceeding. The reasonable expense of every such examination shall
be paid by the Company or, if paid by the Trustee, shall be repaid
by the Company upon demand; and

(g) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.

SECTION 7.03. (a) The recitals contained herein and in the
Debentures (other than the Certificate of Authentication on the
Debentures) shall be taken as the statements of the Company, and
the Trustee assumes no responsibility for the correctness of the
same.

(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures.

(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the
proceeds of such Debentures, or for the use or application of any
monies paid over by the Trustee in accordance with any provision of
this Indenture or established pursuant to Section 2.01, or for the
use or application of any monies received by any paying agent other
than the Trustee.

SECTION 7.04. The Trustee or any paying agent or Debenture
Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have
if it were not Trustee, paying agent or Debenture Registrar.

SECTION 7.05. Subject to the provisions of Section 11.04, all
monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except
to the extent required by law. The Trustee shall be under no
liability for interest on any monies received by it hereunder
except such as it may agree with the Company to pay thereon.

SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled
to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable
expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. The Company
also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful
misconduct or bad faith on the part of the Trustee and arising out
of or in connection with the acceptance or administration of this
trust, including the reasonable costs and expenses of defending
itself against any claim of liability in the premises.

(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Debentures upon all
property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular
Debentures.

SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to
take any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken, suffered
or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.

SECTION 7.08. If the Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions
of, the Trust Indenture Act and this Indenture.

SECTION 7.09. There shall at all times be a Trustee with
respect to the Debentures issued hereunder which shall at all times
be a corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or other person
permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million dollars, and subject to
supervision or examination by Federal, State, Territorial, or
District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any person
directly or indirectly controlling, controlled by, or under common
control with the Company, serve as Trustee. In case at any time
the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in
the manner and with the effect specified in Section 7.10.

SECTION 7.10. (a) The Trustee or any successor hereafter
appointed, may at any time resign with respect to the Debentures of
one or more series by giving written notice thereof to the Company
and by transmitting notice of resignation by mail, first class
postage prepaid, to the Debentureholders of such series, as their
names and addresses appear upon the Debenture Register. Upon
receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Debentures of such
series by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such
notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor
trustee with respect to Debentures of such series, or any
Debentureholder of that series who has been a bona fide holder of
a Debenture or Debentures for at least six months may, subject to
the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of
a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, appoint a successor
trustee.

(b) In case at any time any of the following shall occur:

(1) the Trustee shall fail to comply with the provisions
of Section 7.08 after written request therefor by the Company
or by any Debentureholder who has been a bona fide holder of
a Debenture or Debentures for at least six months; or

(2) The Trustee shall cease to be eligible in accordance
with the provisions of Section 7.09 and shall fail to resign
after written request therefor by the Company or by any such
Debentureholder; or

(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;

then, in any such case, the Company may remove the Trustee with
respect to all Debentures and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 6.08, unless the Trustee's
duty to resign is stayed as provided herein, any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee.
Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor
trustee.

(c) The holders of a majority in aggregate principal amount
of the Debentures of any series at the time outstanding may at any
time remove the Trustee with respect to such series and appoint a
successor trustee.

(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Debentures of a series
pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee
as provided in Section 7.11.

(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Debentures of one or more
series or all of such series, and at any time there shall be only
one Trustee with respect to the Debentures of any particular
series.

SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Debentures, every such
successor trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to
such successor trustee all property and money held by such retiring
Trustee hereunder.

(b) In case of the appointment hereunder of a successor
trustee with respect to the Debentures of one or more (but not all)
series, the Company, the retiring Trustee and each successor
trustee with respect to the Debentures of one or more series shall
execute and deliver an indenture supplemental hereto wherein each
successor trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor trustee all
the rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series to which the
appointment of such successor trustee relates, (2) shall contain
such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures of that or those
series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to
or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and upon
the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee
shall with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for
the performance of the duties and obligations vested in the Trustee
under this Indenture, and each such successor trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series to which the
appointment of such successor trustee relates; but, on request of
the Company or any successor trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor trustee, to the
extent contemplated by such supplemental indenture, the property
and money held by such retiring Trustee hereunder with respect to
the Debentures of that or those series to which the appointment of
such successor trustee relates.

(c) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of
this Section, as the case may be.

(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be
qualified and eligible under this Article.

(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the
succession of such trustee hereunder by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses
appear upon the Debenture Register. If the Company fails to
transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.

SECTION 7.12. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation
shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Debentures so authenticated with the same effect as if such
successor Trustee had itself authenticated such Debentures.

SECTION 7.13. If and when the Trustee shall become a creditor
of the Company (or any other obligor upon the Debentures), the
Trustee shall be subject to the provisions of the Trust Indenture
Act regarding collection of claims against the Company (or any
obligor upon the Debentures).

ARTICLE EIGHT

CONCERNING THE DEBENTUREHOLDERS

SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or specified percentage in aggregate
principal amount of the Debentures of a particular series may take
any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the
holders of such majority or specified percentage of that series
have joined therein may be evidenced by any instrument or any
number of instruments of similar tenor executed by such holders of
Debentures of that series in person or by agent or proxy appointed
in writing.

If the Company shall solicit from the Debentureholders of any
series any request, demand, authorization, direction, notice,
consent, waiver or other action, the Company may, at its option, as
evidenced by an Officers' Certificate, fix in advance a record date
for such series for the determination of Debentureholders entitled
to give such request, demand, authorization, direction, notice,
consent, waiver or other action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other
action may be given before or after the record date, but only the
Debentureholders of record at the close of business on the record
date shall be deemed to be Debentureholders for the purposes of
determining whether Debentureholders of the requisite proportion of
outstanding Debentures of that series have authorized or agreed or
consented to such request, demand, authorization, direction,
notice, consent, waiver or other action, and for that purpose the
outstanding Debentures of that series shall be computed as of the
record date; provided that no such authorization, agreement or
consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the
record date.

SECTION 8.02. Subject to the provisions of Section 7.01,
proof of the execution of any instrument by a Debentureholder (such
proof will not require notarization) or his agent or proxy and
proof of the holding by any person of any of the Debentures shall
be sufficient if made in the following manner:

(a) The fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable to
the Trustee.

(b) The ownership of Debentures shall be proved by the
Debenture Register of such Debentures or by a certificate of the
Debenture Registrar thereof.

SECTION 8.03. Prior to the due presentment for registration
of transfer of any Debenture, the Company, the Trustee, any paying
agent and any Debenture Registrar may deem and treat the person in
whose name such Debenture shall be registered upon the books of the
Company as the absolute owner of such Debenture (whether or not
such Debenture shall be overdue and notwithstanding any notice of
ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Debenture and for all other
purposes; and neither the Company nor the Trustee nor any paying
agent nor any Debenture Registrar shall be affected by any notice
to the contrary.

SECTION 8.04. In determining whether the holders of the
requisite aggregate principal amount of Debentures of a particular
series have concurred in any direction, consent or waiver under
this Indenture, Debentures of that series which are owned by the
Company or any other obligor on the Debentures of that series or by
any person directly or indirectly controlling or controlled by or
under common control with the Company or any other obligor on the
Debentures of that series shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, except that
for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only
Debentures of such series which the Trustee actually knows are so
owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as outstanding for the
purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a person
directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.

SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the
taking of any action by the holders of the majority or percentage
in aggregate principal amount of the Debentures of a particular
series specified in this Indenture in connection with such action,
any holder of a Debenture of that series which is shown by the
evidence to be included in the Debentures the holders of which have
consented to such action may, by filing written notice with the
Trustee, and upon proof of holding as provided in Section 8.02,
revoke such action so far as concerns such Debenture. Except as
aforesaid any such action taken by the holder of any Debenture
shall be conclusive and binding upon such holder and upon all
future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or
in place thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debenture. Any action taken by
the holders of the majority or percentage in aggregate principal
amount of the Debentures of a particular series specified in this
Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the holders of all the
Debentures of that series.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 9.01. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company, when
authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect), without the consent of the
Debentureholders, for one or more of the following purposes:

(a) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants
of the Company contained herein or otherwise established with
respect to the Debentures; or

(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the
protection of the holders of the Debentures of all or any series as
the Board of Directors shall consider to be for the protection of
the holders of Debentures of all or any series, and to make the
occurrence, or the occurrence and continuance, of a default in any
of such additional covenants, restrictions, conditions or
provisions a default or an Event of Default with respect to such
series permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may
provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee
upon such default or may limit the right of the holders of a
majority in aggregate principal amount of the Debentures of such
series to waive such default; or

(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision contained
herein or in any supplemental indenture, or to make such other
provisions in regard to matters or questions arising under this
Indenture as shall not be inconsistent with the provisions of this
Indenture and shall not adversely affect the interests of the
holders of the Debentures of any series; or

(d) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall
become effective only when there is no Debenture outstanding of any
series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision.

The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter
into any such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee without
the consent of the holders of any of the Debentures at the time
outstanding, notwithstanding any of the provisions of Section 9.02.

SECTION 9.02. With the consent (evidenced as provided in
Section 8.01) of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series
affected by such supplemental indenture or indentures at the time
outstanding, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to
the provisions of the Trust Indenture Act as then in effect) for
the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of
the holders of the Debentures of such series under this Indenture;
provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debentures of any series, or
reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the
holder of each Debenture so affected or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of
the holders of each Debenture then outstanding and affected
thereby.

Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the
consent of Debentureholders required to consent thereto as
aforesaid, the Trustee shall join with the Company in the execution
of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such
supplemental indenture.

It shall not be necessary for the consent of the
Debentureholders of any series affected thereby under this Section
to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve
the substance thereof.

Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance of
such supplemental indenture, to the Debentureholders of all series
affected thereby as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.

SECTION 9.03. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article or of Section
10.01, this Indenture shall, with respect to such series, be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the
holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental indenture shall be
and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

SECTION 9.04. Debentures of any series, affected by a
supplemental indenture, authenticated and delivered after the
execution of such supplemental indenture pursuant to the provisions
of this Article or of Section 10.01, may bear a notation in form
approved by the Company, provided such form meets the requirements
of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company
shall so determine, new Debentures of that series so modified as to
conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental
indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Debentures of that series
then outstanding.

SECTION 9.05. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this
Article is authorized or permitted by, and conforms to, the terms
of this Article and that it is proper for the Trustee under the
provisions of this Article to join in the execution thereof.

ARTICLE TEN

CONSOLIDATION, MERGER AND SALE

SECTION 10.01. Nothing contained in this Indenture or in any
of the Debentures shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations (whether
or not affiliated with the Company), or successive consolidations
or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its
successor or successors as an entirety, or substantially as an
entirety, to any other corporation (whether or not affiliated with
the Company or its successor or successors) authorized to acquire
and operate the same; provided, however, the Company hereby
covenants and agrees that, upon any such consolidation, merger,
sale, conveyance, transfer or other disposition, the due and
punctual payment of the principal of (premium, if any) and interest
on all of the Debentures of all series in accordance with the terms
of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of
this Indenture with respect to each series or established with
respect to such series pursuant to Section 2.01 to be kept or
performed by the Company, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of
the Trust Indenture Act as then in effect) satisfactory in form to
the Trustee executed and delivered to the Trustee by the entity
formed by such consolidation, or into which the Company shall have
been merged, or by the entity which shall have acquired such
property.

SECTION 10.02. (a) In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the
Debentures of all series outstanding and the due and punctual
performance of all of the covenants and conditions of this
Indenture or established with respect to each series of the
Debentures pursuant to Section 2.01 to be performed by the Company
with respect to each series, such successor corporation shall
succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of the first part, and
thereupon the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Debentures.
Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company or
any other predecessor obligor on the Debentures, any or all of the
Debentures issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the
order of such successor company, instead of the Company, and
subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall
deliver any Debentures which previously shall have been signed and
delivered by the officers of the predecessor Company to the Trustee
for authentication, and any Debentures which such successor
corporation thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All the Debentures so issued shall
in all respects have the same legal rank and benefit under this
Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such
Debentures had been issued at the date of the execution hereof.

(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in
phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.

(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the property
of any other corporation (whether or not affiliated with the
Company).

SECTION 10.03. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply with
the provisions of this Article.

ARTICLE ELEVEN

SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES

SECTION 11.01. If at any time: (a) the Company shall have
delivered to the Trustee for cancellation all Debentures of a
series theretofore authenticated (other than any Debentures which
shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.07 and Debentures for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereupon repaid to
the Company or discharged from such trust, as provided in Section
11.04); or (b) the Company shall deposit or cause to be deposited
with the Trustee as trust funds (i) the entire amount in monies or
Governmental Obligations or (ii) a combination of monies and
Governmental Obligations, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption under arrangements satisfactory to the
Trustee for the giving of notice of redemption, all Debentures of
a particular series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and
interest due or to become due to their date of maturity or date
fixed for redemption, as the case may be, and if such deposit shall
be made prior to the stated maturity date of the Debentures of that
series, the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the holders of such Debentures will
not recognize gain, loss or income for federal income tax purposes
as a result of the satisfaction and discharge of this Indenture
with respect to such series and such holders will be subject to
federal income taxation on the same amounts and in the same manner
and at the same times as if such satisfaction and discharge had not
occurred, and if the Company shall also pay or cause to be paid all
other sums payable hereunder with respect to such series by the
Company, then this Indenture shall thereupon cease to be of further
effect with respect to such series except for the provisions of
Sections 2.05, 2.07, 4.02 and 7.10, which shall survive until the
date of maturity or redemption date, as the case may be, and
Sections 7.06 and 11.04 which shall survive to such date and
thereafter, and the Trustee, on demand of the Company and at the
cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with
respect to such series.

SECTION 11.02. All monies or Governmental Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.02
shall be held in trust and shall be available for payment as due,
either directly or through any paying agent (including the Company
acting as its own paying agent), to the holders of the particular
series of Debentures for the payment or redemption of which such
monies or Governmental Obligations have been deposited with the
Trustee.

SECTION 11.03. In connection with the satisfaction and
discharge of this Indenture all monies or Governmental Obligations
then held by any paying agent under the provisions of this
Indenture shall, upon demand of the Company, be paid to the Trustee
and thereupon such paying agent shall be released from all further
liability with respect to such monies or Governmental Obligations.

SECTION 11.04. Any monies or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by the
Company, in trust for payment of principal of or premium or
interest on the Debentures of a particular series that are not
applied but remain unclaimed by the holders of such Debentures for
at least two years after the date upon which the principal of (and
premium, if any) or interest on such Debentures shall have
respectively become due and payable, upon the written request of
the Company and unless otherwise required by mandatory provisions
of applicable escheat or abandoned or unclaimed property law, shall
be repaid to the Company on May 31 of each year or (if then held by
the Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further
liability with respect to such monies or Governmental Obligations,
and the holder of any of the Debentures entitled to receive such
payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.

ARTICLE TWELVE

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS

SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Debenture, or
for any claim based thereon or otherwise in respect thereof, shall
be had against any incorporator, stockholder, officer or director,
past, present or future as such, of the Company or of any
predecessor or successor corporation, either directly or through
the Company or any such predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors
as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or
in any of the Debentures or implied therefrom; and that any and all
such personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of, and any and all
such rights and claims against, every such incorporator,
stockholder, officer or director as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or
in any of the Debentures or implied therefrom, are hereby expressly
waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issuance of such
Debentures.

ARTICLE THIRTEEN

MISCELLANEOUS PROVISIONS

SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the
Company shall bind its successors and assigns, whether so expressed
or not.

SECTION 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any
board, committee or officer of the Company shall and may be done
and performed with like force and effect by the corresponding
board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.

SECTION 13.03. The Company by instrument in writing executed
by authority of two-thirds of its Board of Directors and delivered
to the Trustee may surrender any of the powers reserved to the
Company and thereupon such power so surrendered shall terminate
both as to the Company and as to any successor corporation.

SECTION 13.04. Except as otherwise expressly provided herein
any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by
the holders of Debentures to or on the Company may be given or
served by being deposited first class postage prepaid in a post
office letter box addressed (until another address is filed in
writing by the Company with the Trustee), as follows: Indiana
Michigan Power Company, One Summit Square, Fort Wayne, Indiana
46801, Attention: President; with a copy to American Electric Power
Service Corporation, 1 Riverside Plaza, Columbus, Ohio 43215,
Attention: Treasurer. Any notice, election, request or demand by
the Company or any Debentureholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes,
if given or made in writing at the Corporate Trust Office of the
Trustee.

SECTION 13.05. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New
York, and for all purposes shall be construed in accordance with
the laws of said State.

SECTION 13.06. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents
is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional
certificate or opinion need be furnished.

(b) Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant in this Indenture (other than the
certificate provided pursuant to Section 5.03(d) of this Indenture)
shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the
opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been
complied with.

SECTION 13.07. Except as provided pursuant to Section 2.01
pursuant to a Board Resolution, and as set forth in an Officers'
Certificate, or established in one or more indentures supplemental
to this Indenture, in any case where the date of maturity of
interest or principal of any Debenture or the date of redemption of
any Debenture shall not be a business day then payment of interest
or principal (and premium, if any) may be made on the next
succeeding business day with the same force and effect as if made
on the nominal date of maturity or redemption, and no interest
shall accrue for the period after such nominal date.

SECTION 13.08. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with the duties
imposed by the Trust Indenture Act, such imposed duties shall
control.

SECTION 13.09. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.

SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Debentures of any series
shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Indenture or of such Debentures, but this Indenture and such
Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.

SECTION 13.11. The Company will have the right at all times
to assign any of its rights or obligations under the Indenture to
a direct or indirect wholly owned Subsidiary of the Company;
provided that, in the event of any such assignment, the Company
will remain liable for all such obligations. Subject to the
foregoing, this Indenture is binding upon and inures to the benefit
of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties
thereto.

ARTICLE FOURTEEN

SUBORDINATION OF DEBENTURES

SECTION 14.01. The Company covenants and agrees, and each
holder of Debentures issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued
subject to the provisions of this Article Fourteen; and each holder
of a Debenture, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions.

The payment of the principal of, premium, if any, and interest
on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right
of payment to the prior payment in full of all Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter
incurred.

No provision of this Article Fourteen shall prevent the
occurrence of any default or Event of Default hereunder.

SECTION 14.02. In the event and during the continuation of
any default in the payment of principal, premium, interest or any
other payment due on any Senior Indebtedness continuing beyond the
period of grace, if any, specified in the instrument evidencing
such Senior Indebtedness, unless and until such default shall have
been cured or waived or shall have ceased to exist, or in the event
that the maturity of any Senior Indebtedness has been accelerated
because of a default, then, in either case, no payment shall be
made by the Company with respect to the principal (including
redemption and sinking fund payments) of, or premium, if any, or
interest on the Debentures.

In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any holder when such payment is
prohibited by the preceding paragraph of this Section 14.02, such
payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Senior Indebtedness or
their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests
may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a
trustee) notify the Trustee within 90 days of such payment of the
amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to
the holders of Senior Indebtedness.

SECTION 14.03. Upon any payment by the Company, or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due or
to become due upon all Senior Indebtedness shall first be paid in
full, or payment thereof provided for in money in accordance with
its terms, before any payment is made on account of the principal
(and premium, if any) or interest on the Debentures; and upon any
such dissolution or winding-up or liquidation or reorganization any
payment by the Company, or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be
entitled, except for the provisions of this Article Fourteen, shall
by paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or
distribution, or by the holders of the Debentures or by the Trustee
under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such
holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests
may appear, to the extent necessary to pay all Senior Indebtedness
in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the
holders of Debentures or to the Trustee.

In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee or the holders of the
Debentures before all Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of
Senior Indebtedness or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which
any instruments evidencing any Senior Indebtedness may have been
issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or
for the holders of such Senior Indebtedness.

For purposes of this Article Fourteen, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article
Fourteen with respect to the Debentures to the payment of all
Senior Indebtedness which may at the time be outstanding; provided
that (i) the Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of the Senior Indebtedness are not,
without the consent of such holders, altered by such reorganization
or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation
or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in
Article Ten hereof shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section
14.03 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Ten hereof. Nothing in Section 14.02
or in this Section 14.03 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.06.

SECTION 14.04. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Debentures
shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the
holders of the Debentures or the Trustee would be entitled except
for the provisions of this Article Fourteen, and no payment over
pursuant to the provisions of this Article Fourteen, to or for the
benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the
holders of the Debentures, be deemed to be a payment by the Company
to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article Fourteen are and are intended solely
for the purposes of defining the relative rights of the holders of
the Debentures, on the one hand, and the holders of the Senior
Indebtedness on the other hand.

Nothing contained in this Article Fourteen or elsewhere in
this Indenture or in the Debentures is intended to or shall impair,
as between the Company, its creditors other than the holders of
Senior Indebtedness, and the holders of the Debentures, the
obligation of the Company, which is absolute and unconditional, to
pay to the holders of the Debentures the principal of (and premium,
if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of
the Debentures and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising
all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this
Article Fourteen of the holders of Senior Indebtedness in respect
of cash, property or securities of the Company received upon the
exercise of any such remedy.

Upon any payment or distribution of assets of the Company
referred to in this Article Fourteen, the Trustee, subject to the
provisions of Section 7.01, and the holders of the Debentures,
shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy,
liquidation trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the holders of the
Debentures, for the purposes of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article Fourteen.

SECTION 14.05. Each holder of a Debenture by his acceptance
thereof authorizes and directs the Trustee in his behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Fourteen and appoints the
Trustee his attorney-in-fact for any and all such purposes.

SECTION 14.06. The Company shall give prompt written notice
to a Responsible Officer of the Trustee of any fact known to the
Company which would prohibit the making of any payment of monies to
or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article Fourteen.

Notwithstanding the provisions of this Article Fourteen or any
other provision of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts which would prohibit
the making of any payment of monies to or by the Trustee in respect
of the Debentures pursuant to the provisions of this Article
Fourteen, unless and until a Responsible Officer of the Trustee
shall have received written notice thereof at the Corporate Trust
Office of the Trustee from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.01, shall be entitled in all respects to
assume that no such facts exist; provided that if the Trustee shall
not have received the notice provided for in this Section 14.06 at
least two business days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by
any notice to the contrary which may be received by it within two
business days prior to such date.

The Trustee, subject to the provisions of Section 7.01, shall
be entitled to rely on the delivery to it of a written notice by a
person representing himself to be a holder of Senior Indebtedness
(or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a
trustee on behalf of any such holder or holders. In the event that
the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Fourteen, the Trustee may request such
person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such
person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to
the rights of such person under this Article Fourteen, and if such
evidence is not furnished the Trustee may defer any payment to such
person pending judicial determination as to the right of such
person to receive such payment.

SECTION 14.07. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article Fourteen in
respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing
in this Indenture shall deprive the Trustee of any of its rights as
such holder.

With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article Fourteen, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read into
this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and, subject to the provisions of Section 7.01, the
Trustee shall not be liable to any holder of Senior Indebtedness if
it shall pay over or deliver to holders of Debentures, the Company
or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Fourteen
or otherwise.

SECTION 14.08. No right of any present or future holder of
any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or by any act or
failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.

Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee
or the holders of the Debentures, without incurring responsibility
to the holders of the Debentures and without impairing or releasing
the subordination provided in this Article or the obligations
hereunder of the holders of the Debentures to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any person liable in
any manner for the collection of Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company
and any other person.

The First National Bank of Chicago, as Trustee, hereby accepts
the trusts in this Indenture declared and provided, upon the terms
and conditions hereinabove set forth.

IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.

INDIANA MICHIGAN POWER COMPANY

By: /s/ Armando A. Pena
Treasurer

Attest:

By: /s/ John M. Adams, Jr.
Secretary

THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee

By: /s/ R. D. Manella
Vice President

Attest:

By: /s/ Edyie A. Pacella
Trust Officer

State of Ohio }
} ss:
County of Franklin }

On this 22nd day of March, 1996, personally appeared before
me, a Notary Public within and for said County in the State
aforesaid, Armando A. Pena and John M. Adams, Jr., to me known and
known to me to be respectively the Treasurer and Assistant
Secretary of INDIANA MICHIGAN POWER COMPANY, one of the
corporations named in and which executed the foregoing instrument,
who severally acknowledged that they did sign and seal said
instrument as such Treasurer and Assistant Secretary for and on
behalf of said corporation and that the same is their free act and
deed as such Treasurer and Assistant Secretary, respectively, and
the free and corporate act and deed of said corporation.

In Witness Whereof, I have hereunto set my hand and notarial
seal this 22nd day of March, 1996.

[Notarial Seal]

/s/ Mary M. Soltesz
Notary Public, State of Ohio
My Commission Expires 7-12-99

State of Illinois }
} ss:
County of Cook }

Be it remembered, that on this 19th day of March, 1996,
personally appeared before me the undersigned, a Notary Public
within and for said County and State, THE FIRST NATIONAL BANK OF
CHICAGO, one of the corporations named in and which executed the
foregoing instrument, by R. D. Manella one of its Vice Presidents,
and by Edyie A. Pacella, one of its Trust Officers, to me known and
known by me to be such Vice President and Trust Officer,
respectively, who severally duly acknowledged the signing and
sealing of the foregoing instrument to be their free act and
voluntary deed, and the free act and voluntary deed of each of them
as such Vice President and Trust Officer, respectively, and the
free act and voluntary deed of said corporation, for the uses and
purposes therein expressed and mentioned.

In Witness Whereof, I have hereunto set my hand and notarial
seal this 19th day of March, 1996.

[Notarial Seal]

/s/ Nilda Sierra
Notary Public, State of Illinois
My Commission Expires:

INDIANA MICHIGAN POWER COMPANY

AND

THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee

FIRST SUPPLEMENTAL INDENTURE

Dated as of March 1, 1996

INDENTURE

Dated as of March 1, 1996

8% Junior Subordinated
Deferrable Interest Debentures,
Series A, Due 2026

FIRST SUPPLEMENTAL INDENTURE, dated as of the 1st day of
March, 1996 (the "First Supplemental Indenture"), between INDIANA
MICHIGAN POWER COMPANY, a corporation duly organized and existing
under the laws of the State of Indiana (hereinafter sometimes
referred to as the "Company"), and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association organized and existing
under the laws of the United States, as trustee (hereinafter
sometimes referred to as the "Trustee") under the Indenture dated
as of March 1, 1996 between the Company and the Trustee (the
"Indenture"); all terms used and not defined herein are used as
defined in the Indenture.

WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior
subordinated debentures (the "Debentures"), said Debentures to be
issued from time to time in series as might be determined by the
Company under the Indenture, in an unlimited aggregate principal
amount which may be authenticated and delivered thereunder as in
the Indenture provided; and

WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its
Debentures to be known as its 8% Junior Subordinated Deferrable
Interest Debentures, Series A, Due 2026 (said series being
hereinafter referred to as the "Series A Debentures"), the form and
substance of such Series A Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and
this First Supplemental Indenture; and

WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First
Supplemental Indenture, and all requirements necessary to make this
First Supplemental Indenture a valid instrument, in accordance with
its terms, and to make the Series A Debentures, when executed by
the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and
fulfilled, and the execution and delivery hereof have been in all
respects duly authorized;

NOW THEREFORE, in consideration of the purchase and acceptance
of the Series A Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form
and substance of the Series A Debentures and the terms, provisions
and conditions thereof, the Company covenants and agrees with the
Trustee as follows:

ARTICLE ONE

General Terms and Conditions of
the Series A Debentures

SECTION 1.01. There shall be and is hereby authorized a
series of Debentures designated the "8% Junior Subordinated
Deferrable Interest Debentures, Series A, Due 2026", limited in
aggregate principal amount to $40,000,000, which amount shall be as
set forth in any written order of the Company for the
authentication and delivery of Series A Debentures pursuant to
Section 2.01 of the Indenture. The Series A Debentures shall
mature and the principal shall be due and payable together with all
accrued and unpaid interest thereon on March 31, 2026, and shall be
issued in the form of registered Series A Debentures without
coupons.

SECTION 1.02. Except as provided in Section 2.11(c) of the
Indenture, the Series A Debentures shall be issued initially in the
form of a Global Debenture in an aggregate principal amount equal
to all outstanding Series A Debentures, to be registered in the
name of the Depository, or its nominee, and delivered by the
Trustee to the Depository for crediting to the accounts of its
participants pursuant to the instructions of the Company. The
Company shall execute a Global Debenture in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery as hereinabove and in the Indenture
provided. Payments on the Series A Debentures issued as a Global
Debenture will be made to the Depository. The Depository for the
Series A Debentures shall be The Depository Trust Company, New
York, New York.

SECTION 1.03. If, pursuant to the provisions of Section
2.11(c) of the Indenture, the Series A Debentures are issued in
certificated form, principal, premium, if any, and interest on the
Series A Debentures will be payable, the transfer of such Series A
Debentures will be registrable and such Series A Debentures will be
exchangeable for Series A Debentures bearing identical terms and
provisions at the office or agency of the Company only upon
surrender of such certificated Series A Debenture and such other
documents as required by the Indenture; provided, however, that
payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall
appear in the Debenture Register.

SECTION 1.04. Each Series A Debenture shall bear interest at
the rate of 8% per annum from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable (subject to the
provisions of Article Three hereof) quarterly in arrears on each
March 31, June 30, September 30 and December 31 (each, an "Interest
Payment Date"), commencing on June 30, 1996. Interest (other than
interest payable on redemption or maturity) shall be payable to the
person in whose name such Series A Debenture or any predecessor
Series A Debenture is registered at the close of business on the
regular record date for such interest installment. The regular
record date for such interest installment shall be the close of
business on the business day next preceding that Interest Payment
Date; except that if, pursuant to the provisions of Section 2.11(c)
of the Indenture, the Series A Debentures are no longer represented
by a Global Debenture, the regular record date for such interest
installment shall be the close of business on the March 15, June
15, September 15 or December 15 (whether or not a business day)
next preceding the Interest Payment Date. Interest payable on
redemption or maturity shall be payable to the person to whom the
principal is paid. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to
the registered holders on such regular record date, and may be paid
to the person in whose name the Series A Debenture (or one or more
Predecessor Debentures) is registered at the close of business on
a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the
registered holders of the Series A Debentures not less than 10 days
prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Series A Debentures may be
listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.

The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on the Series A
Debentures is not a business day, then payment of interest payable
on such date will be made on the next succeeding day which is a
business day (and without any interest or other payment in respect
of any such delay), except that, if such business day is in the
next succeeding calendar year, such payment shall be made on the
immediately preceding business day, in each case with the same
force and effect as if made on such date.

ARTICLE TWO

Redemption of the Series A Debentures

SECTION 2.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A
Debentures, in whole or in part, from time to time, at the time and
redemption price set forth in the form of Debenture contained in
Exhibit A hereto. Any redemption pursuant to this Section will be
made upon not less than 30 nor more than 60 days' notice. If the
Series A Debentures are only partially redeemed pursuant to this
Section, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided, that if at the
time of redemption, the Series A Debentures are registered as a
Global Debenture, the Depository shall determine by lot the
principal amount of such Series A Debentures held by each Series A
Debentureholder to be redeemed.

ARTICLE THREE

Extension of Interest Payment Period

SECTION 3.01. The Company shall have the right, at any time
during the term of the Series A Debentures, from time to time to
extend the interest payment period of such Series A Debentures for
up to 20 consecutive quarters (the "Extended Interest Payment
Period"), at the end of which period the Company shall pay all
interest accrued and unpaid thereon (together with interest thereon
compounded quarterly at the rate specified for the Series A
Debentures to the extent permitted by applicable law); provided
that, during such Extended Interest Payment Period, the Company
shall not declare or pay any dividend on, or purchase, acquire or
make a liquidation payment with respect to, any of its capital
stock or make any guarantee payments with respect to the foregoing.
Prior to the termination of any such Extended Interest Payment
Period, the Company may further extend such period, provided that
such period together with all such previous and further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond
the maturity of the Series A Debentures. Upon the termination of
any Extended Interest Payment Period and upon the payment of all
accrued and unpaid interest then due, the Company may select a new
Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof.

SECTION 3.02. (a) The Company shall give the holders of the
Series A Debentures and the Trustee written notice of its selection
of such Extended Interest Payment Period at least 10 business days
prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date the Company is required to give notice to
holders of the Series A Debentures (or, if applicable, to the New
York Stock Exchange or other applicable self-regulatory
organization), of the record or payment date of such interest
payment, but in any event not less than two business days prior to
such record date.

(b) The quarter in which any notice is given pursuant to
paragraph (a) of this Section shall constitute one of the 20
quarters which comprise the maximum Extended Interest Payment
Period.

ARTICLE FOUR

Form of Series A Debenture

SECTION 4.01. The Series A Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be
substantially in the form of Exhibit A hereto.

ARTICLE FIVE

Original Issue of Series A Debentures

SECTION 5.01. Series A Debentures in the aggregate principal
amount of $40,000,000 may, upon execution of this First
Supplemental Indenture, or from time to time thereafter, be
executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the
Company, signed by its Chairman of the Board, its President, or any
Vice President and its Treasurer or an Assistant Treasurer, without
any further action by the Company.

ARTICLE SIX

Covenant of the Company

SECTION 6.01. The Company will not declare or pay any
dividend on, or purchase, acquire or make a distribution or
liquidation payment with respect to, any of its capital stock, or
make any guarantee payments with respect thereto, if at such time
(i) there shall have occurred and be continuing any Event of
Default under the Indenture or (ii) the Company shall have given
notice of its selection of an Extended Interest Payment Period and
such period, or any extension thereof, shall be continuing.

ARTICLE SEVEN

Miscellaneous Provisions

SECTION 7.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture
or otherwise clearly required by the context hereof or thereof, all
terms used herein or in said form of Series A Debenture that are
defined in the Indenture shall have the several meanings
respectively assigned to them thereby.

SECTION 7.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed,
and this First Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein
provided.

SECTION 7.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First
Supplemental Indenture.

SECTION 7.04. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an
original; but such counterparts shall together constitute but one
and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, on the date or
dates indicated in the acknowledgments and as of the day and year
first above written.

INDIANA MICHIGAN POWER COMPANY

By: /s/ Armando A. Pena
Treasurer

Attest:

/s/ John M. Adams, Jr.
Secretary

THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee

By: /s/ R. D. Manella
Vice President

Attest:

/s/ Eydie A. Pacella
Trust Officer

STATE OF OHIO }
} ss:
COUNTY OF FRANKLIN }

On this 22nd day of March, 1996, personally appeared before
me, a Notary Public within and for said County in the State
aforesaid, Armando A. Pena and John M. Adams, Jr., to me known and
known to me to be respectively Treasurer and Assistant Secretary of
INDIANA MICHIGAN POWER COMPANY, one of the corporations named in
and which executed the foregoing instrument, who severally
acknowledged that they did sign and seal said instrument as such
Treasurer and Assistant Secretary for and on behalf of said
corporation and that the same is their free act and deed as such
Treasurer and Assistant Secretary, respectively, and the free and
corporate act and deed of said corporation.

In Witness Whereof, I have hereunto set my hand and notarial
seal this 22nd day of March, 1996.

[Notarial Seal]

Name: Mary M. Soltesz
Notary Public, State of Ohio
My Commission Expires 7-12-99

STATE OF }
} ss:
COUNTY OF }

Be it remembered, that on this 19th day of March, 1996,
personally appeared before me the undersigned, a Notary Public
within and for said County and State, THE FIRST NATIONAL BANK OF
CHICAGO, one of the corporations named in and which executed the
foregoing instrument, by R. D. Manella, one of its Vice Presidents,
and by Eydie A. Pacella, one of its Trust Officers, to me known and
known by me to be such Vice President and Trust Officer,
respectively, who severally duly acknowledged the signing and
sealing of the foregoing instrument to be their free act and
voluntary deed, and the free act and voluntary deed of each of them
as such Vice President and Trust Officer, respectively, and the
free act and voluntary deed of said corporation, for the uses and
purposes therein expressed and mentioned.

In Witness Whereof, I have hereunto set my hand and notarial
seal this 19th day of March, 1996.

[Notarial Seal]

/s/ Nilda Sierra
Notary Public, State of
My Commission Expires

Exhibit A

(FORM OF FACE OF DEBENTURE)

[IF THE SERIES A DEBENTURE IS TO BE A GLOBAL DEBENTURE,
INSERT: This Debenture is a Global Debenture within the meaning of
the Indenture hereinafter referred to and is registered in the name
of a Depository or a nominee of a Depository. This Debenture is
exchangeable for Debentures registered in the name of a person
other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by
the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.

Unless this Debenture is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the issuer or its agent for registration of
transfer, exchange or payment, and any Debenture issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC and any payment
hereon is made to Cede & Co., or to such other entity as is
requested by an authorized representative of DTC, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.]

No. $

CUSIP No. 454889 81 7

INDIANA MICHIGAN POWER COMPANY

8% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE,
SERIES A, DUE 2026

INDIANA MICHIGAN POWER COMPANY, a corporation duly organized
and existing under the laws of the State of Indiana (herein
referred to as the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to or
registered assigns, the principal sum of
Dollars on March 31, 2026, and to pay interest on said principal
sum from March 26, 1996 or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest
has been paid or duly provided for, quarterly (subject to deferral
as set forth herein) in arrears on each March 31, June 30,
September 30 and December 31 commencing June 30, 1996 at the rate
of 8% per annum until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum during such
overdue period. Interest shall be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date
on which interest is payable on this Debenture is not a business
day, then payment of interest payable on such date will be made on
the next succeeding day which is a business day (and without any
interest or other payment in respect of any such delay), except
that, if such business day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding business
day, in each case with the same force and effect as if made on such
date. The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date (other than
interest payable on redemption or maturity) will, as provided in
the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Debentures, as defined in said
Indenture) is registered at the close of business on the regular
record date for such interest installment, [which shall be the
close of business on the business day next preceding such Interest
Payment Date.] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(C)
OF THE INDENTURE THE SERIES A DEBENTURES ARE NO LONGER REPRESENTED
BY A GLOBAL DEBENTURE - which shall be the close of business on the
March 15, June 15, September 15 or December 15 (whether or not a
business day) next preceding such Interest Payment Date.] Interest
payable on redemption or maturity shall be payable to the person to
whom the principal is paid. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such regular record date, and
may be paid to the person in whose name this Debenture (or one or
more Predecessor Debentures) is registered at the close of business
on a special record date to be fixed by the Trustee for the payment
of such defaulted interest, notice whereof shall be given to the
registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture. The principal of (and
premium, if any) and the interest on this Debenture shall be
payable at the office or agency of the Company maintained for that
purpose, in any coin or currency of the United States of America
which at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest may
be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Debenture
Register.

Payment of the principal of, premium, if any, and interest on
this Debenture is, to the extent provided in the Indenture,
subordinated and subject in right of payment to the prior payment
in full of all Senior Indebtedness, as defined in the Indenture,
and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Debenture, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all
such purposes. Each Holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon
said provisions.

This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.

Unless the Certificate of Authentication hereon has been
executed by the Trustee or a duly appointed Authentication Agent
referred to on the reverse side hereof, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.

Dated:

INDIANA MICHIGAN POWER COMPANY

By:

Attest:

By:

(FORM OF CERTIFICATE OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.

THE FIRST NATIONAL BANK OF CHICAGO
as Trustee or as Authentication Agent

By:
Authorized Signatory

(FORM OF REVERSE OF DEBENTURE)

This Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the
"Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture
dated as of March 1, 1996 duly executed and delivered between the
Company and The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United
States, as Trustee (herein referred to as the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of March
1, 1996 between the Company and the Trustee (said Indenture as so
supplemented being hereinafter referred to as the "Indenture"), to
which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. By the
terms of the Indenture, the Debentures are issuable in series which
may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of
Debentures is limited in aggregate principal amount as specified in
said First Supplemental Indenture.

Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem this Debenture at the option
of the Company, without premium or penalty, in whole or in part at
any time on or after March 26, 2001 (an "Optional Redemption"), at
a redemption price equal to 100% of the principal amount plus any
accrued but unpaid interest to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more than 60 days'
notice, at the Optional Redemption Price. If the Debentures are
only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if at
the time of redemption, the Debentures are registered as a Global
Debenture, the Depository shall determine by lot the principal
amount of such Debentures held by each Debentureholder to be
redeemed.

In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.

In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Debentures may be declared, and upon such declaration shall become,
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Debenture upon compliance by the
Company with certain conditions set forth therein.

The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Debentures of each
series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Debentures of
any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce
any premium payable upon the redemption thereof, without the
consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture, without the
consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount
of the Debentures of all series at the time outstanding affected
thereby, on behalf of the Holders of the Debentures of such series,
to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to
the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if
any, or interest on any of the Debentures of such series. Any such
consent or waiver by the registered Holder of this Debenture
(unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange herefor
or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Debenture.

No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Debenture at
the time and place and at the rate and in the money herein
prescribed.

The Company shall have the right at any time during the term
of the Debentures, from time to time to extend the interest payment
period of such Debentures for up to 20 consecutive quarters (the
"Extended Interest Payment Period"), at the end of which period the
Company shall pay all interest then accrued and unpaid (together
with interest thereon compounded quarterly at the rate specified
for the Debentures to the extent that payment of such interest is
enforceable under applicable law); provided that, during such
Extended Interest Payment Period the Company shall not declare or
pay any dividend on, or purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, or make any
guarantee payments with respect thereto. Prior to the termination
of any such Extended Interest Payment Period, the Company may
further extend such Extended Interest Payment Period, provided that
such Period together with all such previous and further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond
the maturity of the Debentures. At the termination of any such
Extended Interest Payment Period and upon the payment of all
accrued and unpaid interest and any additional amounts then due,
the Company may select a new Extended Interest Payment Period.

As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by
the registered holder hereof on the Debenture Register of the
Company, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company accompanied by a
written instrument or instruments of transfer in form satisfactory
to the Company or the Trustee duly executed by the registered
Holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.

Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the registered Holder hereof
as the absolute owner hereof (whether or not this Debenture shall
be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal
hereof and premium, if any, and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any
paying agent nor any Debenture Registrar shall be affected by any
notice to the contrary.

No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.

[The Debentures of this series are issuable only in registered
form without coupons in denominations of $25 and any integral
multiple thereof.] [This Global Debenture is exchangeable for
Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. Debentures of this
series so issued are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof.]
As provided in the Indenture and subject to certain limitations
[herein and] therein set forth, Debentures of this series [so
issued] are exchangeable for a like aggregate principal amount of
Debentures of this series of a different authorized denomination,
as requested by the Holder surrendering the same.

All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto

(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)

(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

the within Debenture and all rights thereunder, hereby irrevocably

constituting and appointing such person attorney to transfer such

Debenture on the books of the Issuer, with full power of

substitution in the premises.

Dated:

NOTICE: The signature to this assignment must correspond with the
name as written upon the face of the within Debenture in
every particular, without alteration or enlargement or
any change whatever and NOTICE: Signature(s) must be
guaranteed by a financial institution that is a member of
the Securities Transfer Agents Medallion Program
("STAMP"), the Stock Exchange Medallion Program ("SEMP")
or the New York Stock Exchange, Inc. Medallion Signature
Program ("MSP").

Exhibit 4(c)

INDIANA MICHIGAN POWER COMPANY

AND

THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee

SECOND SUPPLEMENTAL INDENTURE

Dated as of April 1, 1998

INDENTURE

Dated as of March 1, 1996

% Junior Subordinated
Deferrable Interest Debentures,
Series B, Due 2038

SECOND SUPPLEMENTAL INDENTURE, dated as of the 1st day of
April, 1998 (the "Second Supplemental Indenture"), between INDIANA
MICHIGAN POWER COMPANY, a corporation duly organized and existing
under the laws of the State of Indiana (hereinafter sometimes
referred to as the "Company"), and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association organized and existing
under the laws of the United States, as trustee (hereinafter
sometimes referred to as the "Trustee") under the Indenture dated
as of March 1, 1996 between the Company and the Trustee, as
supplemented by the First Supplemental Indenture dated as of March
1, 1996 (the "Indenture"); all terms used and not defined herein
are used as defined in the Indenture.

WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its
Debentures to be known as its % Junior Subordinated Deferrable
Interest Debentures, Series B, Due 2038 (said series being
hereinafter referred to as the "Series B Debentures"), the form and
substance of such Series B Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and
this Second Supplemental Indenture; and

WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this Second
Supplemental Indenture, and all requirements necessary to make this
Second Supplemental Indenture a valid instrument, in accordance
with its terms, and to make the Series B Debentures, when executed
by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and
fulfilled, and the execution and delivery hereof have been in all
respects duly authorized;

NOW THEREFORE, in consideration of the purchase and acceptance
of the Series B Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form
and substance of the Series B Debentures and the terms, provisions
and conditions thereof, the Company covenants and agrees with the
Trustee as follows:

ARTICLE ONE

General Terms and Conditions of
the Series B Debentures

SECTION 1.01. There shall be and is hereby authorized a
series of Debentures designated the " % Junior Subordinated
Deferrable Interest Debentures, Series B, Due 2038", limited in
aggregate principal amount to $125,000,000, which amount shall be
as set forth in any written order of the Company for the
authentication and delivery of Series B Debentures pursuant to
Section 2.01 of the Indenture. The Series B Debentures shall
mature and the principal shall be due and payable together with all
accrued and unpaid interest thereon on , 2038, and shall
be issued in the form of registered Series B Debentures without
coupons.

SECTION 1.02. Except as provided in Section 2.11(c) of the
Indenture, the Series B Debentures shall be issued initially in the
form of a Global Debenture in an aggregate principal amount equal
to all outstanding Series B Debentures, to be registered in the
name of the Depository, or its nominee, and delivered by the
Trustee to the Depository for crediting to the accounts of its
participants pursuant to the instructions of the Company. The
Company shall execute a Global Debenture in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery as hereinabove and in the Indenture
provided. Payments on the Series B Debentures issued as a Global
Debenture will be made to the Depository. The Depository for the
Series B Debentures shall be The Depository Trust Company, New
York, New York.

SECTION 1.03. If, pursuant to the provisions of Section
2.11(c) of the Indenture, the Series B Debentures are issued in
certificated form, principal, premium, if any, and interest on the
Series B Debentures will be payable, the transfer of such Series B
Debentures will be registrable and such Series B Debentures will be
exchangeable for Series B Debentures bearing identical terms and
provisions at the office or agency of the Company only upon
surrender of such certificated Series B Debenture and such other
documents as required by the Indenture; provided, however, that
payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall
appear in the Debenture Register.

SECTION 1.04. Each Series B Debenture shall bear interest at
the rate of % per annum from the original date of issuance
until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable (subject to the
provisions of Article Three hereof) quarterly in arrears on each
March 31, June 30, September 30 and December 31 (each, an "Interest
Payment Date"), commencing on , 1998. Interest (other
than interest payable on redemption or maturity) shall be payable
to the person in whose name such Series B Debenture or any
predecessor Series B Debenture is registered at the close of
business on the regular record date for such interest installment.
The regular record date for such interest installment shall be the
close of business on the business day next preceding that Interest
Payment Date; except that if, pursuant to the provisions of Section
2.11(c) of the Indenture, the Series B Debentures are no longer
represented by a Global Debenture, the regular record date for such
interest installment shall be the close of business on the March
15, June 15, September 15 or December 15 (whether or not a business
day) next preceding the Interest Payment Date. Interest payable on
redemption or maturity shall be payable to the person to whom the
principal is paid. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to
the registered holders on such regular record date, and may be paid
to the person in whose name the Series B Debenture (or one or more
Predecessor Debentures) is registered at the close of business on
a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the
registered holders of the Series B Debentures not less than 10 days
prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Series B Debentures may be
listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.

The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on the Series B
Debentures is not a business day, then payment of interest payable
on such date will be made on the next succeeding day which is a
business day (and without any interest or other payment in respect
of any such delay), except that, if such business day is in the
next succeeding calendar year, such payment shall be made on the
immediately preceding business day, in each case with the same
force and effect as if made on such date.

ARTICLE TWO

Redemption of the Series B Debentures

SECTION 2.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series B
Debentures, in whole or in part, from time to time, at the time and
redemption price set forth in the form of Debenture contained in
Exhibit A hereto. Any redemption pursuant to this Section will be
made upon not less than 30 nor more than 60 days' notice. If the
Series B Debentures are only partially redeemed pursuant to this
Section, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided, that if at the
time of redemption, the Series B Debentures are registered as a
Global Debenture, the Depository shall determine by lot the
principal amount of such Series B Debentures held by each Series B
Debentureholder to be redeemed.

ARTICLE THREE

Extension of Interest Payment Period

SECTION 3.01. The Company shall have the right, at any time
during the term of the Series B Debentures, from time to time to
extend the interest payment period of such Series B Debentures for
up to 20 consecutive quarters (the "Extended Interest Payment
Period"), at the end of which period the Company shall pay all
interest accrued and unpaid thereon (together with interest thereon
compounded quarterly at the rate specified for the Series B
Debentures to the extent permitted by applicable law); provided
that, during such Extended Interest Payment Period, the Company
shall not declare or pay any dividend on, or purchase, acquire or
make a liquidation payment with respect to, any of its capital
stock or make any guarantee payments with respect to the foregoing.
Prior to the termination of any such Extended Interest Payment
Period, the Company may further extend such period, provided that
such period together with all such previous and further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond
the maturity of the Series B Debentures. Upon the termination of
any Extended Interest Payment Period and upon the payment of all
accrued and unpaid interest then due, the Company may select a new
Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof.

SECTION 3.02. (a) The Company shall give the holders of the
Series B Debentures and the Trustee written notice of its selection
of such Extended Interest Payment Period at least 10 business days
prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date the Company is required to give notice to
holders of the Series B Debentures (or, if applicable, to the New
York Stock Exchange or other applicable self-regulatory
organization), of the record or payment date of such interest
payment, but in any event not less than two business days prior to
such record date.

(b) The quarter in which any notice is given pursuant to
paragraph (a) of this Section shall constitute one of the 20
quarters which comprise the maximum Extended Interest Payment
Period.

ARTICLE FOUR

Form of Series B Debenture

SECTION 4.01. The Series B Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be
substantially in the form of Exhibit A hereto.

ARTICLE FIVE

Original Issue of Series B Debentures

SECTION 5.01. Series B Debentures in the aggregate principal
amount of $125,000,000 may, upon execution of this Second
Supplemental Indenture, or from time to time thereafter, be
executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the
Company, signed by its Chairman of the Board, its President, or any
Vice President and its Treasurer or an Assistant Treasurer, without
any further action by the Company.

ARTICLE SIX

Covenant of the Company

ARTICLE SEVEN

Miscellaneous Provisions

SECTION 7.01. Except as otherwise expressly provided in this
Second Supplemental Indenture or in the form of Series B Debenture
or otherwise clearly required by the context hereof or thereof, all
terms used herein or in said form of Series B Debenture that are
defined in the Indenture shall have the several meanings
respectively assigned to them thereby.

SECTION 7.02. The Indenture, as supplemented by this Second
Supplemental Indenture, is in all respects ratified and confirmed,
and this Second Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein
provided.

SECTION 7.04. This Second Supplemental Indenture may be
executed in any number of counterparts each of which shall be an
original; but such counterparts shall together constitute but one
and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, on the date or
dates indicated in the acknowledgments and as of the day and year
first above written.

INDIANA MICHIGAN POWER COMPANY

By:
Treasurer

Attest:
Secretary

THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee

By:
Vice President

Attest:
Trust Officer

STATE OF OHIO }
} ss:
COUNTY OF FRANKLIN }

On this day of , 1998, personally appeared
before me, a Notary Public within and for said County in the State
aforesaid, Armando A. Pena and Thomas G. Berkemeyer, to me known
and known to me to be respectively Treasurer and Assistant
Secretary of INDIANA MICHIGAN POWER COMPANY, one of the
corporations named in and which executed the foregoing instrument,
who severally acknowledged that they did sign and seal said
instrument as such Treasurer and Assistant Secretary for and on
behalf of said corporation and that the same is their free act and
deed as such Treasurer and Assistant Secretary, respectively, and
the free and corporate act and deed of said corporation.

In Witness Whereof, I have hereunto set my hand and notarial
seal this day of , 1998.

[Notarial Seal]

Name: Jana L. Brown
Notary Public, State of Ohio
My Commission Expires 3-15-00

STATE OF }
} ss:
COUNTY OF }

Be it remembered, that on this day of , 1998,
personally appeared before me the undersigned, a Notary Public
within and for said County and State, THE FIRST NATIONAL BANK OF
CHICAGO, one of the corporations named in and which executed the
foregoing instrument, by , one of its Vice
Presidents, and by , one of its Trust Officers, to
me known and known by me to be such Vice President and Trust
Officer, respectively, who severally duly acknowledged the signing
and sealing of the foregoing instrument to be their free act and
voluntary deed, and the free act and voluntary deed of each of them
as such Vice President and Trust Officer, respectively, and the
free act and voluntary deed of said corporation, for the uses and
purposes therein expressed and mentioned.

In Witness Whereof, I have hereunto set my hand and notarial
seal this day of , 1998.

[Notarial Seal]

Name:
Notary Public, State of
My Commission Expires

Exhibit A

(FORM OF FACE OF DEBENTURE)

[IF THE SERIES B DEBENTURE IS TO BE A GLOBAL DEBENTURE,
INSERT: This Debenture is a Global Debenture within the meaning of
the Indenture hereinafter referred to and is registered in the name
of a Depository or a nominee of a Depository. This Debenture is
exchangeable for Debentures registered in the name of a person
other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by
the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.

No. $

CUSIP No. 454889

INDIANA MICHIGAN POWER COMPANY

% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE,
SERIES B, DUE 2038

INDIANA MICHIGAN POWER COMPANY, a corporation duly organized
and existing under the laws of the State of Indiana (herein
referred to as the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to or
registered assigns, the principal sum of
Dollars on , 2038, and to pay interest on said
principal sum from , 1998 or from the most recent
interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on each March
31, June 30, September 30 and December 31 commencing ,
1998 at the rate of % per annum until the principal hereof shall
have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum
during such overdue period. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months. In the event that
any date on which interest is payable on this Debenture is not a
business day, then payment of interest payable on such date will be
made on the next succeeding day which is a business day (and
without any interest or other payment in respect of any such
delay), except that, if such business day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding business day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date
(other than interest payable on redemption or maturity) will, as
provided in the Indenture, be paid to the person in whose name this
Debenture (or one or more Predecessor Debentures, as defined in
said Indenture) is registered at the close of business on the
regular record date for such interest installment, [which shall be
the close of business on the business day next preceding such
Interest Payment Date.] [IF PURSUANT TO THE PROVISIONS OF SECTION
2.11(C) OF THE INDENTURE THE SERIES B DEBENTURES ARE NO LONGER
REPRESENTED BY A GLOBAL DEBENTURE - which shall be the close of
business on the March 15, June 15, September 15 or December 15
(whether or not a business day) next preceding such Interest
Payment Date.] Interest payable on redemption or maturity shall be
payable to the person to whom the principal is paid. Any such
interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such
regular record date, and may be paid to the person in whose name
this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the registered holders of this
series of Debentures not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the
Indenture. The principal of (and premium, if any) and the interest
on this Debenture shall be payable at the office or agency of the
Company maintained for that purpose, in any coin or currency of the
United States of America which at the time of payment is legal
tender for payment of public and private debts; provided, however,
that payment of interest may be made at the option of the Company
by check mailed to the registered holder at such address as shall
appear in the Debenture Register.

The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.

Dated:

INDIANA MICHIGAN POWER COMPANY

By:

Attest:

By:

(FORM OF CERTIFICATE OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.

THE FIRST NATIONAL BANK OF CHICAGO
as Trustee or as Authentication Agent

By:
Authorized Signatory

(FORM OF REVERSE OF DEBENTURE)

This Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the
"Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture
dated as of March 1, 1996 duly executed and delivered between the
Company and The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United
States, as Trustee (herein referred to as the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of March
1, 1996 and the Second Supplemental Indenture dated as of April 1,
1998 between the Company and the Trustee (said Indenture as so
supplemented being hereinafter referred to as the "Indenture"), to
which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. By the
terms of the Indenture, the Debentures are issuable in series which
may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of
Debentures is limited in aggregate principal amount as specified in
said Second Supplemental Indenture.

Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem this Debenture at the option
of the Company, without premium or penalty, in whole or in part at
any time on or after , (an "Optional Redemption"),
at a redemption price equal to 100% of the principal amount plus
any accrued but unpaid interest to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more than 60 days'
notice, at the Optional Redemption Price. If the Debentures are
only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if at
the time of redemption, the Debentures are registered as a Global
Debenture, the Depository shall determine by lot the principal
amount of such Debentures held by each Debentureholder to be
redeemed.

The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Debenture upon compliance by the
Company with certain conditions set forth therein.

The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Debentures of each
series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Debentures of
any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce
any premium payable upon the redemption thereof, without the
consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture, without the
consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount
of the Debentures of all series at the time outstanding affected
thereby, on behalf of the Holders of the Debentures of such series,
to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to
the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if
any, or interest on any of the Debentures of such series. Any such
consent or waiver by the registered Holder of this Debenture
(unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange hereto or
in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.

paying agent nor any Debenture Registrar shall be affected by any
notice to the contrary.

All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto

(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)

(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

the within Debenture and all rights thereunder, hereby irrevocably

constituting and appointing such person attorney to transfer such

Debenture on the books of the Issuer, with full power of

substitution in the premises.

Dated:

Exhibit 5

April 9, 1998

Indiana Michigan Power Company
One Summit Square
Fort Wayne, Indiana 46801

Dear Sirs:

With respect to the Registration Statement on Form S-3 of Indiana
Michigan Power Company (hereinafter called the "Company") relating to the
issuance and sale by the Company of its Junior Subordinated Debentures
(hereinafter called the "Junior Subordinated Debentures"), we wish to advise
you as follows:

We are of the opinion that, when the steps mentioned in the next
paragraph below have been taken, the Junior Subordinated Debentures will be
valid, legal and binding obligations of the Company, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.

The steps to be taken which are referred to in the next preceding
paragraph consist of the following:

(1) Appropriate definitive action by the Board of Directors of the
Company with respect to the proposed transaction set forth in said
Registration Statement;

(2) Appropriate action by and before the Indiana Utility Regulatory
Commission in respect of the proposed transaction set forth in said
Registration Statement;

(3) Compliance with the Securities Act of 1933, as amended, and
with the Trust Indenture Act of 1939, as amended; and

(4) Issuance and sale of the Junior Subordinated Debentures by the
Company in accordance with the governmental and corporate authorizations
aforesaid.

Insofar as this opinion relates to matters governed by laws of the
State of New York and the Federal law of the United States, this firm has
consulted, and may consult further, with local counsel in which this
firm has confidence and will rely, as to such matters, upon such
opinions or advice of such counsel which will be delivered to this firm
prior to the closing of the sale of the Junior Subordinated Debentures.

We consent to the filing of this opinion as an exhibit to said
Registration Statement and to the use of our name and the inclusion of the
statements in regard to us set forth in said Registration Statement under
the caption "Legal Opinions".

Very truly yours,

/s/ Simpson Thacher & Bartlett

SIMPSON THACHER & BARTLETT

Exhibit 8

April 9, 1998

Re: Issuance and Sale of Junior
Subordinated Deferrable Interest
Debentures, Series B, Due 2038 by Indiana
Michigan Power Company

Indiana Michigan Power Company
One Summit Square
Fort Wayne, Indiana 46801

Ladies and Gentlemen:

We have acted as special tax counsel ("Tax Counsel") to Indiana Michigan
Power Company, an Indiana corporation (the "Company"), in connection with the
preparation of the Preliminary Prospectus dated April 9, 1998 (the
"Prospectus") by the Company with respect to the issuance and sale of the
Junior Subordinated Deferrable Interest Debentures, Series B, Due 2038 (the
"New Junior Subordinated Debentures") by the Company pursuant to the
Indenture (the "Indenture"), dated March 1, 1996, between the Company and The
First National Bank of Chicago, a national banking association organized and
existing under the laws of the United States, as trustee (the "Trustee").
The New Junior Subordinated Debentures will be offered for sale to investors
pursuant to the Prospectus.

All capitalized terms used in this opinion letter and not otherwise defined
herein shall have the meaning ascribed to such terms in the Prospectus.

In delivering this opinion letter, we have reviewed and relied upon: (i) the
Prospectus, (ii) the Indenture; and (iii) a form of the New Junior
Subordinated Debentures. Further, we have relied upon certain other
statements and representations of the Company. We also have examined and
relied upon originals or copies, certified or otherwise identified to
our satisfaction, of such records of the Company and such other documents,
certificates and records as we have deemed necessary or appropriate as a
basis for the opinions set forth herein.

In our examination of such material, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals
and the conformity to original documents of all copies of documents submitted
to us. In addition, we also have assumed that the transactions related to
the issuance of the New Junior Subordinated Debentures will be consummated in
accordance with the terms of the documents and forms of documents described
herein.

On the basis of the foregoing we are of the opinion that, subject to the
qualifications and limitations set forth herein and in the Prospectus under
the caption "Certain United States Federal Income Tax Consequences", the
statements set forth in the Prospectus under such caption insofar as they
purport to constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect thereto, constitute
accurate summaries of the matters described therein in all material respects.

Our opinion is based upon the Internal Revenue Code of 1986, as amended, the
Treasury regulations promulgated thereunder and other relevant authorities and
law, all as in effect on the date hereof. Consequently, future changes in
the law may cause the tax treatment of the transactions referred to herein to
be materially different from that described above.

We are members of the Bar of the State of New York, and we do not express any
opinion herein concerning any law other than the federal law of the United
States.

We hereby consent to the filing of this opinion letter as an exhibit to
Registration Statement Form S-3 filed by the Company with respect to the New
Junior Subordinated Debentures and to the use of our name in the Prospectus
under the captions "Certain United States Federal Income Tax Consequences"
and "Legal Opinions".
Very truly yours,
/s/ Simpson Thacher & Bartlett

SIMPSON THACHER & BARTLETT

Exhibit 23(a)

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this
Registration Statement of Indiana Michigan Power Company on Form
S-3 of our reports dated February 24, 1998, appearing in and
incorporated by reference in the Annual Report on Form 10-K of
Indiana Michigan Power Company for the year ended December 31, 1997
and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.

Deloitte & Touche LLP
Columbus, Ohio
April 9, 1998

Exhibit 24

INDIANA MICHIGAN POWER COMPANY

I, John F. Di Lorenzo, Jr., Secretary of INDIANA MICHIGAN
POWER COMPANY, HEREBY CERTIFY that the following constitutes a true
and exact copy of resolutions duly adopted by the affirmative vote
of a majority of the Board of Directors of said Company at meetings
of said Board duly and legally held on December 17, 1997 and March
26, 1998, at which meetings a quorum of the Board of Directors of
said Company was present and voting throughout. I further certify
that said resolutions have not been altered, amended or rescinded
and that said resolutions are presently in full force and effect.
Given under my hand this 8th day of April, 1998.

/s/ John F. Di Lorenzo, Jr.
Secretary

INDIANA MICHIGAN POWER COMPANY
December 17, 1997

The Chairman outlined a proposed financing program
through December 31, 1998 of the Company involving the issuance and
sale, either at competitive bidding, through a negotiated public
offering with one or more agents or underwriters or through private
placement, of up to $162,000,000 aggregate principal amount of Debt
Securities comprised of first mortgage bonds or secured or
unsecured promissory notes, in one or more new series, each series
to have a maturity of not more than fifty years ("Debt
Securities"). The Debt Securities may be issued in the form of
first mortgage bonds, senior or subordinated debentures (including
junior subordinated debentures) or other promissory notes, or a
combination of each. The Chairman stated that, as an alternative
to issuing Debt Securities, the Company might enter into a term
loan agreement or note purchase agreement with one or more
commercial banks, financial institutions or other institutional
investors, providing for the issuance of unsecured notes with a
maturity in excess of nine months in an aggregate principal amount
of up to $162,000,000.

The Chairman then stated that it was proposed that the
proceeds to be received in connection with the proposed sale of
Debt Securities would be added to the general funds of the Company
and used to pay at maturity, or prepay as may be appropriate and as
may then be desirable, or purchase directly or indirectly currently
outstanding debt and/or cumulative preferred stock or for working
capital.

Thereupon, on motion duly made and seconded, it was
unanimously

RESOLVED, that the proposed financing program of this
Company, as outlined at this meeting, be, and the same hereby
is, in all respects ratified, confirmed and approved; and
further

RESOLVED, that the proper officers of this Company be,
and they hereby are, authorized to take all steps necessary,
or in their opinion desirable, to carry out the financing
program outlined at this meeting.

The Chairman reminded the meeting that the Company has in
place an Order of the Indiana Utility Regulatory Commission
("IURC") authorizing the issuance of up to $162,000,000 of Debt
Securities through December 31, 1997, and that, in connection with
the proposed financing program, an application has been filed with
the IURC to extend such authority through December 31, 1998. The
Chairman also stated that it may be necessary to file one or more
Registration Statements pursuant to the applicable provisions of
the Securities Act of 1933, as amended, and to register or qualify
the securities to be sold pursuant to such financing program under
the "blue sky" laws of various jurisdictions.

Thereupon, on motion duly made and seconded, it was
unanimously

RESOLVED, in connection with the proposed financing
program approved at this meeting, the actions taken by the
officers of this Company in connection with the execution and
filing of a petition with the Indiana Utility Regulatory Com-
mission be, and they hereby are, ratified, confirmed and
approved in all respects; and further

RESOLVED, that the proper officers of this Company be,
and they hereby are, authorized to execute and file with the
Securities and Exchange Commission ("SEC") on behalf of the
Company one or more Registration Statements pursuant to the
applicable provisions of the Securities Act of 1933, as
amended; and further

RESOLVED, that it is desirable and in the best
interest of the Company that the Debt Securities be qualified
or registered for sale in various jurisdictions; that the
Chairman of the Board, the President, any Vice President or
the Treasurer and the Secretary or an Assistant Secretary
hereby are authorized to determine the jurisdictions in which
appropriate action shall be taken to qualify or register for
sale all or such part of the Debt Securities of the Company
as said officers may deem advisable; that said officers are
hereby authorized to perform on behalf of the Company any and
all such acts as they may deem necessary or advisable in
order to comply with the applicable laws of any such
jurisdictions, and in connection therewith to execute and
file all requisite papers and documents, including, but not
limited to, applications, reports, surety bonds, irrevocable
consents and appointments of attorneys for service of
process; and the execution by such officers of any such paper
or document or the doing by them of any act in connection
with the foregoing matters shall conclusively establish their
authority therefor from the Company and the approval and
ratification by the Company of the papers and documents so
executed and the action so taken; and further

RESOLVED, that the proper officers of this Company be,
and they hereby are, authorized and directed to take any and
all further action in connection therewith, including the
execution and filing of such amendment or amendments,
supplement or supplements and exhibit or exhibits thereto as
the officers of this Company may deem necessary or desirable.

The Chairman further stated that, in connection with the
filing with the SEC of one or more Registration Statements relating
to the proposed issuance and sale of up to $162,000,000 of Debt
Securities, there was to be filed with the SEC a Power of Attorney,
dated December 17, 1997, executed by the officers and directors of
this Company appointing true and lawful attorneys to act in
connection with the filing of such Registration Statement(s) and
any and all amendments thereto.

Thereupon, on motion duly made and seconded, the
following preambles and resolutions were unanimously adopted:

WHEREAS, Indiana Michigan Power Company proposes to
file with the SEC one or more Registration Statements for the
registration pursuant to the applicable provisions of the
Securities Act of 1933, as amended, of up to $162,000,000
aggregate principal amount of Debt Securities, in one or more
new series, each series to have a maturity of not less than
nine months and not more than fifty years; and

WHEREAS, in connection with said Registration
Statement(s), there is to be filed with the SEC a Power of
Attorney, dated December 17, 1997, executed by certain of the
officers and directors of this Company appointing E. Linn
Draper, Jr., G. P. Maloney, Bruce M. Barber and Armando A.
Pena, or any one of them, their true and lawful attorneys,
with the powers and authority set forth in said Power of
Attorney;

NOW, THEREFORE, BE IT

RESOLVED, that each and every one of said officers and
directors are, and they hereby are, authorized to execute
said Power of Attorney; and further

RESOLVED, that any and all action hereafter taken by
any of said named attorneys under said Power of Attorney be,
and the same hereby is, ratified and confirmed and that said
attorneys shall have all the powers conferred upon them and
each of them by said Power of Attorney; and further

RESOLVED, that said Registration Statement(s) and any
amendments thereto, hereafter executed by any of said
attorneys under said Power of Attorney be, and the same
hereby are, ratified and confirmed as legally binding upon
this Company to the same extent as if the same were executed
by each said officer and director of this Company personally
and not by any of said attorneys.

The Chairman advised the meeting that it was proposed to
designate independent counsel for the successful bidder or bidders
and/or agents of the Company for the new series of Debt Securities
proposed to be issued and sold in connection with the proposed
financing program of the Company.

Thereupon, on motion duly made and seconded, it was
unanimously

RESOLVED, that Dewey Ballantine LLP be, and said firm
hereby is, designated as independent counsel for the suc-
cessful bidder or bidders and/or agents of the Company for
the new series of Debt Securities of this Company proposed to
be issued and sold in connection with the proposed financing
program of this Company.

The Chairman stated that it may be desirable to enter
into a treasury hedge agreement, such as a treasury lock agreement,
treasury put option or interest rate collar agreement ("Treasury
Hedge Agreement") to protect against future interest rate movements
in connection with the issuance of the Debt Securities. The
Chairman recommended that the Board authorize the appropriate
officers of the Company to enter into a Treasury Hedge Agreement,
provided that the amount covered by such Agreement would not exceed
the principal amount of Debt Securities the Company anticipates
offering and that the term of such Agreement will not exceed 90
days.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer of this
Company be, and each of them hereby is, authorized to execute
and deliver in the name and on behalf of this Company, a
Treasury Hedge Agreement in such form as shall be approved by
the officer executing the same, such execution to be
conclusive evidence of such approval, provided that the
amount covered by such Agreement would not exceed the
principal amount of Debt Securities the Company anticipates
offering and that the term of such Agreement will not exceed
90 days; and further

RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized to execute and deliver such
other documents and instruments, and to do such other acts
and things, that in their judgment may be necessary or
desirable in connection with the transactions authorized in
the foregoing resolutions.

The Chairman explained that, with respect to the issuance
of up to $162,000,000 of Debt Securities through one or more agents
under a medium term note program, the Company could enter into a
Selling Agency Agreement. The Chairman recommended that the Board
authorize the appropriate officers of the Company to enter into one
or more Selling Agency Agreements with securities dealers yet to be
determined.

Thereupon, upon motion duly made and seconded, it was
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer of this
Company be, and each of them hereby is, authorized to execute
and deliver in the name and on behalf of this Company, one or
more Selling Agency Agreements with such securities dealers
in such form as shall be approved by the officer executing
the same, such execution to be conclusive evidence of such
approval; and further

RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized to execute and deliver such
other documents and instruments, and to do such other acts
and things, that in their judgment may be necessary or
desirable, in connection with the transactions authorized in
the foregoing resolutions.

The Chairman next explained that the Company could also
enter into an Underwriting Agreement (the "Underwriting Agree-
ment"), with certain underwriters, under which the underwriters may
purchase up to $162,000,000 aggregate principal amount of Debt
Securities having an interest rate and maturity to be determined,
such interest rate not to exceed 10% per annum and the maturity
thereof to be not less than nine months nor more than 50 years. Any
initial fluctuating rate of interest on any first mortgage bonds
will not exceed 10% per annum at the time of issuance. The Chairman
recommended that the Board authorize the appropriate officers of
the Company to enter into an Underwriting Agreement and determine
the purchase price of the Debt Securities, provided that the price
shall not be less than 95%, including compensation to the
underwriters of no more than 3.5%, of the aggregate principal
amount of the Debt Securities.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer of this
Company be, and each of them hereby is, authorized to execute
and deliver in the name and on behalf of this Company, an
Underwriting Agreement in such form as shall be approved by
the officer executing the same, such execution to be
conclusive evidence of such approval, provided that the
purchase price of the Debt Securities shall not be less than
95%, including compensation to the underwriters of no more
than 3.5%, of the aggregate principal amount of the Debt
Securities; and further

The Chairman related to the meeting that any Underwriting
Agreement and any Selling Agency Agreement would be entered into in
connection with the issuance of Debt Securities. He further noted
that, in order to enable the Company to perform its obligations
under the Selling Agency Agreement or the Underwriting Agreement
approved at this meeting providing for the sale of up to
$162,000,000 aggregate principal amount of first mortgage bonds, it
was proposed that the Board authorize the appropriate officers to
create one or more new series of first mortgage bonds ("First
Mortgage Bonds"), to be issued under the Mortgage and Deed of
Trust, dated June 1, 1939, of the Company to Irving Trust Company,
now The Bank of New York, as Trustee, as heretofore supplemented
and amended, and as to be supplemented and amended by one or more
additional Supplemental Indentures to the Mortgage and Deed of
Trust, each of said new series of First Mortgage Bonds to be
entitled and designated as, in the case of a medium term note
program, "First Mortgage Bonds, Designated Secured Medium Term
Notes, ______% Series due ____________", and, in the case of an
Underwriting Agreement, "First Mortgage Bonds, ______% Series due
____________", with the interest rate, maturity and certain other
terms of each such series of First Mortgage Bonds to be designated
at the time of creation thereof. Any fixed rate of interest will
not exceed by more than 3.0% the yield to maturity on United States
Treasury bonds of comparable maturity at the time of pricing of the
First Mortgage Bonds, any such interest rate not to exceed 10% per
annum and the maturity thereof to be not less than nine months nor
more than 50 years. Any initial fluctuating rate of interest on any
variable rate First Mortgage Bonds will not exceed 10% per annum at
the time of issuance.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the officers of this Company (including
the Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary) be, and they hereby are, authorized to
create up to $162,000,000 aggregate principal amount of first
mortgage bonds in one or more series, each series to be
issued under and secured by the Mortgage and Deed of Trust,
dated June 1, 1939, of the Company to Irving Trust Company,
now The Bank of New York, as Trustee, and certain indentures
supplemental thereto, including one or more additional
Supplemental Indentures to the Mortgage and Deed of Trust, in
substantially the form presented to this meeting, to be made
by this Company to The Bank of New York, as Trustee (said
Mortgage and Deed of Trust as heretofore supplemented and
amended, and as to be supplemented and amended, being herein-
after called the "Mortgage"), each series to be designated
and to be distinguished from bonds of all other series by the
title, in the case of a medium term note program, "First
Mortgage Bonds, Designated Secured Medium Term Notes, ______%
Series due __________", and, in the case of an Underwriting
Agreement, "First Mortgage Bonds, ______% Series due
____________", (hereinafter called "bonds of each New
Series"), provided that the interest rate, maturity and the
applicable redemption provisions, if any, and such other
terms, including, but not limited to, interest payment dates
and record payment dates, shall be designated at the time of
creation thereof and further provided that any fixed rate of
interest rate applicable to First Mortgage Bonds will not
exceed by more than 3% the yield to maturity of United States
Treasury bonds of comparable maturity at the time of pricing
of the bonds and any initial interest rate on any variable
rate First Mortgage Bonds will not exceed 10% per annum at
the time of issuance of the bonds and the maturity shall not
be less than nine months nor more than 50 years; and further

RESOLVED, that the officers of this Company (including
the Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary) be, and they hereby are, authorized and
directed to execute and deliver, under the seal of and on
behalf of this Company, one or more additional Supplemental
Indentures, specifying the designation, terms, redemption
provisions and other provisions of the bonds of each New
Series and providing for the creation of the bonds of each
New Series and effecting the amendments to the Mortgage
described therein, such instrument to be substantially in the
form presented to this meeting and ordered to be filed with
the records of this Company, with such changes therein as the
officers executing the same may, upon the advice of counsel,
approve at the time of execution (such approval to be con-
clusively evidenced by their execution thereof); that The
Bank of New York is hereby requested to join in the execution
of said Supplemental Indentures, as Trustee; and that the
officers (including the Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary) of this Company be,
and they hereby are, authorized and directed to record and
file, or to cause to be recorded and filed, said Supplemental
Indentures in such offices of record and take such other
action as may be deemed necessary or advisable in the opinion
of counsel for the Company; and that such officers be, and
they hereby are, authorized to determine and establish the
basis on which the bonds of each New Series shall be
authenticated under the Mortgage; and further

RESOLVED, that the terms and provisions of the bonds of each New
Series and the forms of the registered bonds of each New
Series and of the Trustee's Authentication Certificate be,
and they hereby are, established as provided in the form of
Supplemental Indenture to the Mortgage herein before
authorized, with such changes as may be required upon the
establishment of the further terms thereof by the appropriate
officers of the Company as herein authorized; and further

RESOLVED, that the registered bonds of each New Series
shall be substantially in the form set forth in the form of
Supplemental Indenture approved at this meeting; and further

RESOLVED, that, subject to compliance with the
provisions of Article V or VI of the Mortgage, the Chairman
of the Board, the President, any Vice President or the
Treasurer and the Secretary or any Assistant Secretary of
this Company be, and they hereby are, authorized and directed
to execute under the seal of this Company in accordance with
the provisions of Section 14 of Article II of the Mortgage
(the signatures of such officers to be effected either
manually or by facsimile, in which case such facsimile is
hereby adopted as the signature of such officer thereon), and
to deliver to The Bank of New York, as Trustee under the
Mortgage, bonds of each New Series in the aggregate principal
amount of up to $162,000,000 as definitive fully registered
bonds without coupons in denominations of $1,000 or integral
multiples thereof; and further

RESOLVED, that if any authorized officer of this
Company who signs, or whose facsimile signature appears upon,
any of the bonds of each New Series ceases to be such an
officer prior to their issuance, the bonds of each New Series
so signed or bearing such facsimile signature shall neverthe-
less be valid; and further

RESOLVED, that, subject as aforesaid, The Bank of New
York, as such Trustee, be, and it hereby is, requested to
authenticate, by the manual signature of an authorized
officer of such Trustee, bonds of each New Series and to
deliver the same from time to time in accordance with the
written order of this Company signed in the name of this
Company by its Chairman, President or one of its Vice
Presidents and its Treasurer or one of its Assistant
Treasurers; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer or any Assistant
Treasurer of the Company be, and they hereby are, authorized
to execute any Treasurer's Certificate required by Section
28(2) of Article V and Section 29(2) of Article VI of the
Mortgage, in connection with the authentication and delivery
of the bonds of the New Series, and in connection with any
other actions taken, or to be taken, under the Mortgage; and
further

RESOLVED, that the law firms of Baker & Daniels and
Mollison Law Offices, P.C. and that John F. Di Lorenzo, Jr.
of Upper Arlington, Ohio, John M. Adams, Jr. of Worthington,
Ohio, Thomas G. Berkemeyer of Hilliard, Ohio, Ann B. Graf of
Columbus, Ohio and David C. House, of Upper Arlington, Ohio,
attorneys and employees of American Electric Power Service
Corporation, an affiliate of this Company, be, and each of
them hereby is, appointed Counsel to render the Opinion of
Counsel required by Article V, Section 28(7) or Article VI,
Section 29(3) of said Mortgage in connection with the
authentication and delivery of the bonds of each New Series;
and further

RESOLVED, that James J. Markowsky of Worthington,
Ohio, John R. Jones, III of Dublin, Ohio or Bruce A. Renz of
Worthington, Ohio, engineers and officers of American
Electric Power Service Corporation, an affiliate of this
Company, be, and each of them hereby is, appointed the
Engineer to make with the President, any Vice President, the
Treasurer or an Assistant Treasurer of this Company any
Engineer's Certificate required by Article VI of the
Mortgage, in connection with the authentication and delivery
of the bonds of each New Series; and further

RESOLVED, that the office of The Bank of New York, at
101 Barclay Street, in the Borough of Manhattan, The City of
New York, be, and it hereby is, fixed as the office or agency
of this Company for the payment of the principal of and the
interest on the bonds of each New Series and as the office or
agency of the Company in The City of New York for the
registration, transfer and exchange of registered bonds of
each New Series; and further

RESOLVED, that said The Bank of New York, be, and it
hereby is, appointed as the agent of this Company, in the
Borough of Manhattan, The City of New York for the payment of
the principal of and interest on the bonds of each New
Series, and for the registration, transfer and exchange of
registered bonds of each New Series; and further

RESOLVED, that said The Bank of New York, be, and it
hereby is, appointed the withholding agent and attorney of
this Company for the purpose of withholding any and all taxes
required to be withheld by the Company under the Federal
revenue acts from time to time in force and the Treasury
Department regulations pertaining thereto, from interest paid
from time to time on bonds of each New Series, and is hereby
authorized and directed to make any and all payments and
reports and to file any and all returns and accompanying
certificates with the Federal Government which it may be per-
mitted or required to make or file as such agent under any
such revenue act and/or Treasury Department regulation
pertaining thereto; and further

RESOLVED, that, until further action by this Board,
the officers of this Company be, and they hereby are,
authorized and directed to effect transfers and exchanges of
bonds of each New Series, pursuant to Section 12 of the
Mortgage without charging a sum for any bond of the New
Series issued upon any such transfer or exchange other than
a charge in connection with each such transfer or exchange
sufficient to reimburse the Company for any tax or other
governmental charge required to be paid by the Company in
connection therewith; and further

RESOLVED, that the firm of Deloitte & Touche LLP be,
and they hereby are, appointed as independent accountants to
render any independent public accountant's certificate
required under Section 29 of the Mortgage; and further

RESOLVED, that the officers of the Company be, and
they hereby are, authorized and directed to execute such
instruments and papers and to do any and all acts as to them
may seem necessary or desirable to carry out the purposes of
the foregoing resolutions.

The Chairman noted that as an alternative to the issuance
of First Mortgage Bonds, the Company may issue and sell unsecured
notes pursuant to the Selling Agency Agreement or the Underwriting
Agreement. The Chairman stated to the meeting that it was necessary
that the Board authorize the execution and delivery of an Indenture
to be entered into between the Company and The Bank of New York or
any successor trustee (the "Indenture") to provide for the issuance
of unsecured notes, in an unlimited aggregate principal amount to
be issued from time to time in one or more series ("Notes").

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer, and
the Secretary or any Assistant Secretary be, and
they hereby are, authorized to execute and deliver
the Indenture in substantially the form of such
Indenture submitted to this meeting, with such
insertions therein and changes thereto as shall be
approved by the officer executing the same, such
execution to be conclusive evidence of such
approval; and that The Bank of New York is hereby
approved and appointed as trustee under such
Indenture.

The Chairman then stated to the meeting that, in order to
enable the Company to perform its obligations under the Selling
Agency Agreement or the Underwriting Agreement approved at this
meeting providing for the sale of up to $162,000,000 aggregate
principal amount of the Notes, it was necessary that the Board
authorize the execution and delivery of one or more Company Orders
or Supplemental Indentures to the Indenture between the Company and
The Bank of New York ("Supplemental Indenture"), forms of which
were presented to the meeting. The terms of each series of Notes
will be established under a Company Order or a Supplemental
Indenture. The interest rate, maturity and certain other terms
have not yet been determined. The Chairman recommended that the
Board authorize the appropriate officers of the Company to
determine the financial terms and conditions of the Notes,
including without limitation, (i) the principal amount of the Notes
to be sold in each offering, (ii) the interest or method of
determining the interest on the Notes, (iii) the maturity (which
shall not exceed 50 years from the date of issuance) and redemption
provisions of the Notes and (iv) such other terms and conditions as
are contemplated or permitted by the Indenture, a Company Order or
a Supplemental Indenture. Any fixed interest rate applicable to
the Notes would not exceed by more than 3.0% the yield to maturity
at the date of pricing on United States Treasury Bonds of
comparable maturity. Any initial fluctuating interest rate
applicable to the Notes would not exceed 10% at the time of
issuance.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer or any
Assistant Treasurer and the Secretary or any
Assistant Secretary be, and they hereby are,
authorized to create up to $162,000,000 aggregate
principal amount of Notes to be issued under the
Indenture and one or more Supplemental Indentures
or Company Orders, in substantially the form pre-
sented to this meeting, and with such financial
terms and conditions as determined by appropriate
officers of this Company, pursuant to the Indenture
and one or more Supplemental Indentures or Company
Orders, and with either a fixed rate of interest
which shall not exceed by more than 3.0% the yield
to maturity at the date of pricing on United States
Treasury bonds of comparable maturity or at an
initial fluctuating rate of interest which at the
time of issuance would not exceed 10%, or at a
combination of such described fixed or fluctuating
rates, and to specify the maturity, redemption or
tender provisions and other terms, at the time of
creation thereof with the maturity not to exceed 50
years; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer or any
Assistant Treasurer and the Secretary or any
Assistant Secretary be, and they hereby are,
authorized and directed to execute and deliver, on
behalf of this Company, one or more Supplemental
Indentures or Company Orders, specifying the desig-
nation, terms, redemption provisions and other
provisions of the Notes and providing for the
creation of each series of Notes, each such
instrument to be substantially in the form pre-
sented to this meeting, with such insertions there-
in and changes thereto as shall be approved by the
officer executing the same, such execution to be
conclusive evidence of such approval; that Bank of
New York is hereby requested to join in the
execution of any Supplemental Indenture, as
Trustee; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer or any
Assistant Treasurer be, and they hereby are,
authorized and directed to execute and deliver, on
behalf of this Company, to the extent not
determined in a Supplemental Indenture or Company
Order, a certificate requesting the authentication
and delivery of any such Notes and establishing the
terms of any trance of such series or specifying
procedures for doing so in accordance with the
procedures established in the Indenture; and
further

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer and
the Secretary or any Assistant Secretary of this
Company be, and they hereby are, authorized and
directed to execute in accordance with the provi-
sions of the Indenture (the signatures of such
officers to be effected either manually or by fac-
simile, in which case such facsimile is hereby
adopted as the signature of such officer thereon),
and to deliver to The Bank of New York, as Trustee
under the Indenture, the Notes in the aggregate
principal amount of up to $162,000,000 as
definitive fully registered bonds without coupons
in denominations of $1,000 or integral multiples
thereof or such other denominations as may be
permitted under the Indenture; and further

RESOLVED, that if any authorized officer of
this Company who signs, or whose facsimile signa-
ture appears upon, any of the Notes ceases to be
such an officer prior to their issuance, the Notes
so signed or bearing such facsimile signature shall
nevertheless be valid; and further

RESOLVED, that, subject as aforesaid, The Bank
of New York, as such Trustee, be, and it hereby is,
requested to authenticate, by the manual signature
of an authorized officer of such Trustee, the Notes
and to deliver the same from time to time in
accordance with the written order of this Company
signed in the name of this Company by its Chairman,
President, any Vice President, the Treasurer or any
Assistant Treasurer; and further

RESOLVED, that John F. Di Lorenzo, Jr. of
Upper Arlington, Ohio, John M. Adams, Jr. of
Worthington, Ohio, Thomas G. Berkemeyer of
Hilliard, Ohio, Ann B. Graf of Columbus, Ohio, and
David C. House of Upper Arlington, Ohio, attorneys
and employees of American Electric Power Service
Corporation, an affiliate of this Company, be, and
each of them hereby is, appointed Counsel to render
any Opinion of Counsel required by the Indenture in
connection with the authentication and delivery of
the Notes; and further

RESOLVED, that the office of The Bank of New
York, at 101 Barclay Street, in the Borough of
Manhattan, The City of New York, be, and it hereby
is, designated as the office or agency of this
Company, in accordance with the Indenture, for the
payment of the principal of and the interest on the
Notes, for the registration, transfer and exchange
of Notes and for notices or demands to be served on
the Company with respect to the Notes; and further

RESOLVED, that said The Bank of New York be,
and it hereby is, appointed the withholding agent
and attorney of this Company for the purpose of
withholding any and all taxes required to be
withheld by the Company under the Federal revenue
acts from time to time in force and the Treasury
Department regulations pertaining thereto, from
interest paid from time to time on the Notes, and
is hereby authorized and directed to make any and
all payments and reports and to file any and all
returns and accompanying certificates with the
Federal Government which it may be permitted or
required to make or file as such agent under any
such revenue act and/or Treasury Department regula-
tion pertaining thereto; and further

RESOLVED, that the officers of this Company
be, and they hereby are, authorized and directed to
effect transfers and exchanges of the Notes,
pursuant to the Indenture without charging a sum
for any Note issued upon any such transfer or
exchange other than a charge in connection with
each such transfer or exchange sufficient to cover
any tax or other governmental charge in relation
thereto; and further

RESOLVED, that The Bank of New York be, and it
hereby is, appointed as Note Registrar in
accordance with the Indenture; and further

RESOLVED, that the officers of the Company be,
and they hereby are, authorized and directed to
execute such instruments and papers and to do any
and all acts as to them may seem necessary or
desirable to carry out the purposes of the fore-
going resolutions.

The Chairman then reminded the Board that the Company
has entered into an Indenture with The First National Bank of
Chicago dated as of March 1, 1996 ("Indenture") in connection
with the Company's issuance of junior subordinated debentures
("Debentures"). The Chairman stated that, in connection with the
proposed sale of additional Debentures, it was necessary that the
Board of Directors of this Company authorize the execution and
delivery of one or more Supplemental Indentures to the Indenture
("Supplemental Indenture"). The Debentures will be created under
the Supplemental Indenture and will also allow the Company to
defer payment of interest for up to five years. The Chairman
then recommended that the Board authorize the appropriate
officers of the Company to create the Debentures and specify the
interest rate, maturity, redemption provisions, and other terms
at the time of creation with the maturity not to exceed 50 years
and bearing interest to maturity at either a fixed rate, floating
rate, or combination thereof. Any fixed interest rate of the
Debentures will exceed by more than 3.0% the yield to maturity on
United States Treasury bonds of comparable maturity at the time
of pricing. Any initial fluctuating rate on the Debentures will
not be greater than 10% at the time of issuance of the
Debentures.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer, and the
Secretary or any Assistant Secretary be, and they hereby
are, authorized to (i) create up to $75,000,000 aggregate
principal amount of Debentures to be issued under the
Indenture and the Supplemental Indenture, in such form as
shall be approved by the officer executing the same, such
execution to be conclusive evidence of such approval, to be
designated and to be distinguished from debentures of all
other series by the title "Junior Subordinated Deferrable
Interest Debentures, Series __, Due ____________", and (ii)
to specify the interest rate, maturity, redemption
provisions and other terms at the time of creation with the
maturity not to exceed 50 years, and bearing interest to
maturity at either a fixed rate, floating rate, or
combination thereof, with any fixed interest rate of the
Debentures not to exceed by more than 3.0% the yield to
maturity on United States Treasury bonds of comparable
maturity at the time of pricing and any initial fluctuating
rate not to exceed 10% at the time of pricing the
Debentures; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant
Secretary be, and they hereby are, authorized and directed
to execute and deliver, under the seal of and on behalf of
this Company, the Supplemental Indenture, specifying the
designation, terms, redemption provisions and other pro-
visions of the Debentures and providing for the creation of
the Debentures, such instrument to be substantially in the
form presented to this meeting, with such insertions
therein and changes thereto as shall be approved by the
officer executing the same, such execution to be conclusive
evidence of such approval; that The First National Bank of
Chicago is hereby requested to join in the execution of the
Supplemental Indenture, as Trustee; and further

RESOLVED, that the terms and provisions of the
Debentures and the form of the registered Debentures and of
the Trustee's Authentication Certificate shall be
established by the appropriate officers of the Company as
herein authorized; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer and the
Secretary or any Assistant Secretary of this Company be,
and they hereby are, authorized and directed to execute
under the seal of this Company in accordance with the
provisions of the Indenture (the signatures of such
officers to be effected either manually or by facsimile, in
which case such facsimile is hereby adopted as the
signature of such officer thereon), and to deliver to The
First National Bank of Chicago, as Trustee under the
Indenture, the Debentures in the aggregate principal amount
of up to $75,000,000 as definitive fully registered bonds
without coupons in denominations of $25 or integral
multiples thereof; and further

RESOLVED, that if any authorized officer of this
Company who signs, or whose facsimile signature appears
upon, any of the Debentures ceases to be such an officer
prior to their issuance, the Debentures so signed or
bearing such facsimile signature shall nevertheless be
valid; and further

RESOLVED, that, subject as aforesaid, The First
National Bank of Chicago, as such Trustee, be, and it
hereby is, requested to authenticate, by the manual
signature of an authorized officer of such Trustee, the
Debentures and to deliver the same from time to time in
accordance with the written order of this Company signed in
the name of this Company by its Chairman, President, one of
its Vice Presidents or its Treasurer, and its Secretary or
one of its Assistant Secretaries; and further

RESOLVED, that John F. Di Lorenzo, Jr. of Upper
Arlington, Ohio, John M. Adams, Jr. of Worthington, Ohio,
Ann B. Graf of Columbus, Ohio, Thomas G. Berkemeyer of
Hilliard, Ohio, and David C. House of Upper Arlington,
Ohio, attorneys and employees of American Electric Power
Service Corporation, an affiliate of this Company, be, and
each of them hereby is, appointed Counsel to render any
Opinion of Counsel required by of the Indenture in
connection with the authentication and delivery of the
Debentures; and further

RESOLVED, that the office of The First National Bank
of Chicago, One First National Plaza, Suite 0126, Chicago,
Illinois, be, and it hereby is, designated as the office or
agency of this Company, in accordance with Section 4.02 of
the Indenture, for the payment of the principal of and the
interest on the Debentures, for the registration, transfer
and exchange of Debentures and for notices or demands to be
served on the Company with respect to the Debentures; and
further

RESOLVED, that The First National Bank of Chicago,
be, and it hereby is, appointed the withholding agent and
attorney of this Company for the purpose of withholding any
and all taxes required to be withheld by the Company under
the Federal revenue acts from time to time in force and the
Treasury Department regulations pertaining thereto, from
interest paid from time to time on the Debentures, and is
hereby authorized and directed to make any and all payments
and reports and to file any and all returns and
accompanying certificates with the Federal Government which
it may be permitted or required to make or file as such
agent under any such revenue act and/or Treasury Department
regulation pertaining thereto; and further

RESOLVED, that the officers of this Company be, and
they hereby are, authorized and directed to effect
transfers and exchanges of the Debentures, pursuant to
Section 2.05 of the Indenture without charging a sum for
any Debenture issued upon any such transfer or exchange
other than a charge in connection with each such transfer
or exchange sufficient to cover any tax or other
governmental charge in relation thereto; and further

RESOLVED, that The First National Bank of Chicago
be, and it hereby is, appointed as Debenture Registrar in
accordance with Section 2.05(b) of the Indenture; and
further

RESOLVED, that the officers of the Company be, and
they hereby are, authorized and directed to execute such
instruments and papers and to do any and all acts as to
them may seem necessary or desirable to carry out the
purposes of the foregoing resolutions.

The Chairman indicated to the meeting that it may be
desirable that the Debentures be listed on the New York Stock
Exchange and in connection with any such application, to register
the Debentures under the Securities Exchange Act of 1934. In
this connection, he presented a form of indemnity agreement to be
executed and delivered by this Company to the New York Stock
Exchange in any such application for such listing.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the officers of this Company be, and
they hereby are, authorized, in their discretion, to make
application, on behalf of this Company, to the New York
Stock Exchange for the listing of up to $75,000,000
aggregate principal amount of Debentures; and further

RESOLVED, that G. P. Maloney, Armando A. Pena and
Bruce M. Barber, or any one of them, be, and they hereby
are, designated to appear before the New York Stock
Exchange with full authority to make such changes in such
application or any agreements relating thereto as may be
necessary or advisable to conform with the requirements for
listing; and further

RESOLVED, that the proper officers be, and they
hereby are, authorized to execute and file, on behalf of
this Company, an application for the registration of up to
$75,000,000 aggregate principal amount of Debentures with
the Securities and Exchange Commission pursuant to the
provisions of the Securities Exchange Act of 1934, in such
form as the officers of this Company executing the same may
determine; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer be, and each
of them hereby is, authorized to take any other action and
to execute any other documents that in their judgment may
be necessary or desirable in connection with listing the
Debentures on the New York Stock Exchange.

The Chairman further stated that it would be desirable
to authorize the proper officers of the Company on behalf of the
Company, to enter into one or more term loan or note purchase
agreements with terms similar to those contained in the repre-
sentative forms presented to the meeting ("Proposed Agreement")
with one or more as yet unspecified commercial banks, financial
institutions or other institutional investors, which would
provide for the Company to borrow up to $162,000,000. Such
borrowings would be evidenced by an unsecured promissory note or
notes ("Note") of the Company maturing not less than nine months
nor more than thirty years after the date thereof, bearing
interest to maturity at either a fixed rate, floating rate, or
combination thereof. Any fixed interest rate of the Note will
not exceed 3.0% of the yield to maturity of United States
Treasury obligations that mature on or about the date of maturity
of the note. Any fluctuating rate will not be greater than 200
basis points above the rate of interest announced publicly by the
lending bank from time to time as its base or prime rate, but in
no event with the initial fluctuating interest rate exceed 10% at
the time of issuance.

The Chairman explained that, although the Proposed
Agreement does not represent a definitive agreement with any com-
mercial bank, financial institution or other institutional
investor, it is believed, on the basis of discussions with cer-
tain of such entities, that one or more of them would enter into
an agreement on terms substantially similar to those in the Pro-
posed Agreement. Accordingly, the Chairman recommended to the
Board that it authorize the proper officers of the Company to
enter into one or more new term loan agreements on terms substan-
tially similar to those in the Proposed Agreement.

Thereupon, upon motion duly made and seconded, it was
unanimously

RESOLVED, that the form, terms and provisions of the
Proposed Agreement between the Company and one or more as yet
unspecified commercial banks, financial institutions or other
institutional investors, a copy of which has been submitted to
this meeting, including the forms, terms and provisions of the
Note of the Company appended thereto, be, and the same hereby
are, in all respects approved; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer of this Company
be, and each of them hereby is, authorized to execute and
deliver in the name and on behalf of this Company, the
Proposed Agreement in substantially the form of such agreement
submitted to this meeting, at either a fixed rate of interest
which shall not be greater than 3.0% above the yield to matur-
ity of United States Treasury obligations that mature on or
about the maturity date of the Note issued thereunder, or a
fluctuating rate of interest which shall not be greater than
3.0% above the rate of interest announced publicly by the
lending bank from time to time as its base or prime rate, but
in no event will the fluctuating interest rate exceed 10% at
the time of issuance, or at a combination of such described
fixed or fluctuating rates, with such insertions therein and
changes thereto as shall be approved by the officer executing
the same, such execution to be conclusive evidence of such
approval; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer of this Company
be, and each of them hereby is, authorized, in the name and on
behalf of this Company, to borrow from one or more commercial
banks, financial institutions or other institutional
investors, up to $162,000,000, upon the terms and subject to
the conditions of the Proposed Agreement as executed and
delivered; and in connection therewith, to execute and deliver
a promissory note in the form appended to the Proposed
Agreement, with such insertions therein and changes thereto
consistent with such Proposed Agreement as shall be approved
by the officer executing the same, such execution to be con-
clusive evidence of such approval; and further

RESOLVED, that the proper officers of this Company be,
and they hereby are, authorized to execute and deliver such
other documents and instruments, and to do such other acts and
things, that in their judgment may be necessary or desirable
in connection with the transactions authorized in the
foregoing resolutions.

INDIANA MICHIGAN POWER COMPANY
March 26, 1998

The Chairman reminded the Board that it had approved on
December 17, 1997 a proposed financing program through December
31, 1998 of the Company involving the issuance and sale, either
at competitive bidding, through a negotiated public offering with
one or more agents or underwriters or through private placement,
of up to $162,000,000 aggregate principal amount of Debt
Securities comprised of first mortgage bonds or secured or
unsecured promissory notes, in one or more new series, each
series to have a maturity of not more than fifty years ("Debt
Securities"). The Debt Securities may be issued in the form of
first mortgage bonds, senior or subordinated debentures
(including junior subordinated debentures) or other promissory
notes, or a combination of each. As part of this financing
program the Board approved the creation and issuance of up to
$75,000,000 aggregate principal amount of junior subordinated
debentures ("Debentures"). The Chairman then recommended that the
$75,000,000 aggregate principal amount be increased to
$125,000,000 aggregate principal amount; in no event, however,
will the Company issue and sell more than $162,000,000 of Debt
Securities as currently authorized by the Indiana Utilities
Regulatory Commission.

The Chairman then reminded the Board that the Company has
entered into an Indenture with The First National Bank of Chicago
dated as of March 1, 1996 ("Indenture") in connection with the
Company's issuance of Debentures. The Chairman stated that, in
connection with the proposed sale of additional Debentures, it
was necessary that the Board of Directors of this Company
authorize the execution and delivery of one or more Supplemental
Indentures to the Indenture ("Supplemental Indenture"). The
Debentures will be created under the Supplemental Indenture and
will also allow the Company to defer payment of interest for up
to five years. The Chairman then recommended that the Board
authorize the appropriate officers of the Company to create the
Debentures and specify the interest rate, maturity, redemption
provisions, and other terms at the time of creation with the
maturity not to exceed 50 years and bearing interest to maturity
at either a fixed rate, floating rate, or combination thereof.
Any fixed interest rate of the Debentures will not exceed by more
than 3.0% the yield to maturity on United States Treasury bonds
of comparable maturity at the time of pricing. Any initial
fluctuating rate on the Debentures will not be greater than 10%
at the time of issuance of the Debentures.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer, and the
Secretary or any Assistant Secretary be, and they hereby
are, authorized to (i) create up to $125,000,000 aggregate
principal amount of Debentures to be issued under the
Indenture and the Supplemental Indenture, in such form as
shall be approved by the officer executing the same, such
execution to be conclusive evidence of such approval, to be
designated and to be distinguished from debentures of all
other series by the title "Junior Subordinated Deferrable
Interest Debentures, Series __, Due ____________", and (ii)
to specify the interest rate, maturity, redemption
provisions and other terms at the time of creation with the
maturity not to exceed 50 years, and bearing interest to
maturity at either a fixed rate, floating rate, or
combination thereof, with any fixed interest rate of the
Debentures not to exceed by more than 3.0% the yield to
maturity on United States Treasury bonds of comparable
maturity at the time of pricing and any initial fluctuating
rate not to exceed 10% at the time of pricing the
Debentures; and further

RESOLVED, that the Chairman of the Board, the
President, any Vice President or the Treasurer and the
Secretary or any Assistant Secretary of this Company be,
and they hereby are, authorized and directed to execute
under the seal of this Company in accordance with the
provisions of the Indenture (the signatures of such
officers to be effected either manually or by facsimile, in
which case such facsimile is hereby adopted as the
signature of such officer thereon), and to deliver to The
First National Bank of Chicago, as Trustee under the
Indenture, the Debentures in the aggregate principal amount
of up to $125,000,000 as definitive fully registered bonds
without coupons in denominations of $25 or integral
multiples thereof; and further

RESOLVED, that John F. Di Lorenzo, Jr. of Upper
Arlington, Ohio, Ann B. Graf of Columbus, Ohio, Thomas G.
Berkemeyer of Hilliard, Ohio, David C. House of Upper
Arlington, Ohio, and William E. Johnson of Columbus, Ohio,
attorneys and employees of American Electric Power Service
Corporation, an affiliate of this Company, be, and each of
them hereby is, appointed Counsel to render any Opinion of
Counsel required by of the Indenture in connection with the
authentication and delivery of the Debentures; and further

RESOLVED, that The First National Bank of Chicago
be, and it hereby is, appointed as Debenture Registrar in
accordance with Section 2.05(b) of the Indenture; and
further

RESOLVED, that the officers of the Company be, and
they hereby are, authorized and directed to execute such
instruments and papers and to do any and all acts as to
them may seem necessary or desirable to carry out the
purposes of the foregoing resolutions.

Thereupon, it was, on motion duly made and seconded,
unanimously

RESOLVED, that the officers of this Company be, and
they hereby are, authorized, in their discretion, to make
application, on behalf of this Company, to the New York
Stock Exchange for the listing of up to $125,000,000
aggregate principal amount of Debentures; and further

RESOLVED, that the proper officers be, and they
hereby are, authorized to execute and file, on behalf of
this Company, an application for the registration of up to
$125,000,000 aggregate principal amount of Debentures with
the Securities and Exchange Commission pursuant to the
provisions of the Securities Exchange Act of 1934, in such
form as the officers of this Company executing the same may
determine; and further

RESOLVED, that the proper officers of this Company be,
and they hereby are, authorized to execute and deliver such
other documents and instruments, and to do such other acts and
things, that in their judgment may be necessary or desirable
connection with the transactions authorized in the foregoing
resolutions.

INDIANA MICHIGAN POWER COMPANY
POWER OF ATTORNEY

Each of the undersigned directors or officers of INDIANA
MICHIGAN POWER COMPANY, an Indiana corporation, which is to file
with the Securities and Exchange Commission, Washington, D.C.
20549, under the provisions of the Securities Act of 1933, as
amended, one or more Registration Statements for the registration
thereunder of up to $162,000,000 aggregate principal amount of
its first mortgage bonds or senior or subordinated debt
(including junior subordinated debentures), or other promissory
notes, or a combination of each, in one or more new series, each
series to have a maturity of not more than 50 years, does hereby
appoint E. LINN DRAPER, JR., G. P. MALONEY, BRUCE M. BARBER and
ARMANDO A. PENA his true and lawful attorneys, and each of them
his true and lawful attorney, with power to act without the
others, and with full power of substitution or resubstitution, to
execute for him and in his name said Registration Statement(s)
and any and all amendments thereto, whether said amendments add
to, delete from or otherwise alter the Registration Statement(s)
or the related Prospectus(es) included therein, or add or
withdraw any exhibits or schedules to be filed therewith and any
and all instruments necessary or incidental in connection
therewith, hereby granting unto said attorneys and each of them
full power and authority to do and perform in the name and on
behalf of each of the undersigned, and in any and all capacities,
every act and thing whatsoever required or necessary to be done
in and about the premises, as fully and to all intents and
purposes as each of the undersigned might or could do in person,
hereby ratifying and approving the acts of said attorneys and
each of them.

IN WITNESS WHEREOF the undersigned have hereunto set their
hands this 17th day of December, 1997.

/s/ E. Linn Draper, Jr. /s/ G. P. Maloney
E. Linn Draper, Jr. L.S. G. P. Maloney L.S.

/s/ K. G. Boyd /s/ J. J. Markowsky
K. G. Boyd L.S. J. J. Markowsky L.S.

/s/ C. R. Boyle, III /s/ D. B. Synowiec
C. R. Boyle, III L.S. D. B. Synowiec L.S.

/s/ G. A. Clark /s/ J. H. Vipperman
G. A. Clark L.S. J. H. Vipperman L.S.

/s/ P. J. DeMaria /s/ W. E. Walters
P. J. DeMaria L.S. W. E. Walters L.S.

/s/ W. N. D'Onofrio /s/ E. H. Wittkamper
W. N. D'Onofrio L.S. E. H. Wittkamper L.S.

/s/ Wm. J. Lhota
Wm. J. Lhota L.S.

<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1
--------

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)

____________________________

THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)

One First National Plaza, Chicago, Illinois 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

_____________________________

INDIANA MICHIGAN POWER COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)

Indiana 35-0410455
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

ONE SUMMIT SQUARE
FORT WAYNE, INDIANA 46801
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

Debt Securities
(TITLE OF INDENTURE SECURITIES)
<PAGE>

ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.

Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.

(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.

The trustee is authorized to exercise corporate
trust powers.

ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.

No such affiliation exists with the trustee.

ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.

1. A copy of the articles of association of the
trustee now in effect.*

2. A copy of the certificates of authority of the
trustee to commence business.*

3. A copy of the authorization of the trustee to
exercise corporate trust powers.*

4. A copy of the existing by-laws of the trustee.*

5. Not Applicable.

6. The consent of the trustee required by
Section 321(b) of the Act.

7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
<PAGE>

8. Not Applicable.

9. Not Applicable.

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 6th day of April, 1998.

THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE

By /s/ John R. Prendiville
John R. Prendiville
Vice President

* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
25, 1996 (REGISTRATION NO. 333-14201).
<PAGE>

EXHIBIT 6

THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT

April 6, 1998

Securities and Exchange Commission
Washington, D.C. 20549

Gentlemen:

In connection with the qualification of an indenture between Indiana
Michigan Power Company and The First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.

Very truly yours,

THE FIRST NATIONAL BANK OF CHICAGO

By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>

EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>

Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31,1997

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount
outstanding as of the last business day of the quarter.

SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>

Dollar Amounts in C400
----------------- ----

ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency
and coin(1) 0081 4,267,336 1.a.
b. Interest-bearing balances(2) 0071 6,893,837 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule
RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)..................... 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease
losses RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned
income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 24,783,863 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized leases) 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 134,959 8.
9. Customers' liability to this bank on acceptances outstanding 2155 644,340 9.
10. Intangible assets (from Schedule RC-M) 2143 268,501 10.
11. Other assets (from Schedule RC-F) 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11) 2170 58,483,415 12.
</TABLE>

- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>

<S> <C> <C>
Legal Title of Bank: The First National Call Date: 09/30/97 ST-BK: 17-1630 FFIEC
Bank of Chicago 031
Address: One First National Page RC-2
Plaza, Ste 0303
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN
Thousands BIL MIL THOU
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,756,846 13.a
(1) Noninterest-bearing(1) RCON 6631 9,197,227 13.a.1
(2) Interest-bearing RCON 6636 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 14,811,410 13.b.
(1) Noninterest bearing RCFN 6631 332,801 13.b.1
(2) Interest-bearing RCFN 6636 14,478,609 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 43,763 15.a
b. Trading Liabilities(from Schedule RC-D)............. RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 1,360,165 16.a
b. With a remaining maturity of than one year through three years A547 576,492 16.b
c. With a remaining maturity of more than three years............. A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 644,341 18
19. Subordinated notes and debentures (2) RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 58,483,415 29

</TABLE>
<TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external capital Number
auditors as of any date during 1996 .......................................RCFD 6724 ...................N/A M.1
<S> <C> <C> <C>
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing standards performed by other external auditors (may be required by
by a certified public accounting firm which submits a state chartering authority)
report on the bank
2 = Independent audit of the bank's parent 5 = Review of the bank's financial statements
holding company conducted in accordance by external auditors
with generally accepted auditing
standards by a certified public accounting 6 = Compilation of the bank's financial
firm which submits a report on the consolidated statements by external auditors
holding company (but not on the bank separately)
7 = Other audit procedures (excluding tax
preparation work)
3 = Directors' examination of the bank conducted 8 = No external audit work
in accordance with generally accepted
auditing standards by a certified public accounting
firm (may be required by state chartering authority)
</TABLE>
____________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.